The Pros And Consequences Of Brexit

The decision of the United Kingdom to leave the European Union has served in reshaping the way politics works in Europe. On June 3rd, 2016 a massive 30 million people came out to vote on the future of their countries. In the end, the vote to leave won 51.9% to 48.1%. Places like England and Wales both voted in favor of the exit, while Scotland and Northern Ireland voted overwhelmingly to stay in. While the long term effects of this decision obviously need time to be observed, the immediate economic impact has been somewhat mixed. The day after the vote was a cause for concern in that “the pound slumped after the referendum - and remains around 10% lower against the dollar and 15% down against the euro” (Wheeler 17). In contrast to this,

At present, there’s a lot of uncertainty surrounding BREXIT, what is certain is that there will be an increase in restrictions and introduction of political borders should BREXIT were to happen which will result in an increase in cost of trade and services. EU remains the largest market for Britain's exports, constituting 40-45% of its exports. As such, UK's primary goal would likely to retain access to the EU's internal market, but in all likelihood it would be difficult to gain liberal trade terms from the EU if BREXIT

One of the most visible benefit of the membership in the EU is the absence of trade tariffs between its members. However non-European markets are becoming more important for British producers because of the stagnation of the Eurozone economy and economic growth of the other region especially Asian one. Main claim against membership in the EU is that Britain sells much more goods to the EU than buys. Still this is barely a good reason to leave the Union. Mainly the EU’s trade surplus is accounted by only two counties: Germany and Netherlands, so the UK will not be able to dictate its terms after exit (Sprinford, Tilford and Whyte, 2014). In addition open market with the EU counties boosts the UK’s economy providing more labour and capital for producers. If Britain withdrew from full membership some options may take place in trading relations. Researchers mostly agree that British exit will directly cut the UK’s income from trade in the case of any not free trade agreements. However, the new free trade agreement seems likely to take place.

There is no doubt that the ‘brexit’ will have a significant impact on UK, especially for the financial system. In the following few days after referendum, the financial market shows the immediate impact of ‘brexit’, the sterling exchange rate index sharply fallen by 9%, the bank equity price had fallen by 20%, the ten-year UK government bond yield had fallen by 52 basis point. In its latest financial stability report, the Bank of England had identified that the risks around the referendum on the United Kingdom’s membership of the European Union as the most significant near-term domestic risks to financial stability. (‘Financial Stability Report’ Bank of England, 30 July 2016). The following risks around referendum are considered main threaten to UK’s financial stability:

The Impact of Brexit will depend on the outcome of negotiations with the other 27 EU member states. Brexit could create a condition of unwanted impact for the UK. The European Union (EU) not only loses a major paying state, it also has its effects in the field of economic, trade, immigration and

Early this year the United Kingdom held a referendum to decide whether to leave or stay apart of the European Union. This event is called the “Brexit” (Britain exiting the European Union), but even though the acronym only includes Britain it means the entirety of the United Kingdom. In the referendum, most of England and Whales voted to leave while Northern Ireland and Scotland voted to stay. Ultimately the United Kingdom’s vote was won in favor of leaving the EU with a 51.9% vote to stay and a 48.1% vote to leave (BBC News). Now the question is what does this mean for the UK and how will this impact its economy in the future? It may be too early to tell how this will play out, but for us to identify what is happening now we must thoroughly and truly understand the reasons for this Brexit in the first place.

Due to Brexit London Stock Exchange crashed and it saw trillions of pounds wiped off from UK’s share market. The share market became volatile. The investors of UK’s share market decided to move their funds to other European share market in Germany and Ireland and France. As a result pound lost its exchange value for the first time in last 15

It is precise that we begin by explaining the meaning of the term “Brexit”; it is a portmanteau of the words “Britain” and “Exit”, which was just one of the terms for the results of the 2016 referendum, the other one was “Bremain” (Britain and remain) which was a lot less promoted and controversial. For the 2016 referendum, 52% of the votes went for Britain leaving the European Union, in a poll with 72% of participation, a total of 33.577.342 votes, 17.410.742 for Brexit and 16.577.342 for Britain staying in the European Union (BBC World, 2016). England voted for Brexit, by 53.4% to 46.6%, as did Wales, with Leave getting 52.5% of the vote and Remain 47.5%. Scotland and Northern Ireland both backed staying in the EU. Scotland backed Remain by 62% to 38%, while 55.8% in Northern Ireland voted Remain and 44.2% Leave (Hunt and Wheeler, 2016).

4). Under the optimistic scenario the UK will have to pay the EU to remain a part of the EU’s single market, resulting in an increased cost to trade, while under the pessimistic the cost of trade for Britain will increase due to tariffs and increased regulations to get their product into the market. These increased tariffs, and the costs needed to meet regulations hurt the suppliers of goods resulting in a slowdown in the flow of goods and a reduced GDP. Dhingra et. al. uses the estimations of the two scenarios to show a direct correlation between leaving the UK leaving the EU and detrimental impacts to the UK’s economy, and as such the flow of goods.

The EU (European Union) has become a formidable power through trade, hence creating more problems with the rest of the world. Occasionally its dominance has helped it manipulate its trading partners. Starting with regional labor standards to development policies, and internationally ranging from global governance to foreign policy (Marshall & Jaggers, 2010).This paper will mainly focus on the EU as a dominant trade block. A factor that has undoubtedly contributed to the many conflicts it has internationally. The analysis includes different but recent trade related conflicts the EU is involved in and points out the factors that led to the misunderstanding, and in some cases if there was a third party involved in the issue. The analysis also shows if a form of solution was reached or if the dispute was left unresolved, and the possible outcomes it had during the time of the confrontation. Lastly, it summarizes the main ideas of the paper and gives a comprehensive overview of the analysis.

The news article the Economist reveals that Brexit[1] triggers a round of reshoring[2].The article described the situation of an entrepreneur Nimisha Raja started a healthy fruit snack business right when Britain voted to leave the EU. Her business model assumed that she could have boundless access to relatively lower price fruit in Europe and only used apple from Britain. Yet this is not possible due to a depreciation in the pound after the result of Brexit was released, which increased her cost and thereby has to shift her focus from bringing her offshore ingredient market back to Britain. She used to buy 20% of ingredients from Britain and it has risen to 70%. The article mentioned that this is also happening to various industries, like car-making and household manufacturing industries. Yet reshoring also works both ways as it mentioned almost half of the European businesses are expecting to reduce their British supplies due to higher cost from Brexit. This article shows that reshoring has both gains and losses in Britain, but requires a deeper understanding of class materials to analyze how Brexit brings benefits and costs to the country and how it affects the relationship between Britain and the mainland Europe.

On June 23rd, 2016 the United Kingdom held a referendum that would ultimately decide their economic and global relationships with the European Union, along with the rest of the world. Brexit, the highly known nickname of the phrase “Britain exiting” was vote to spate from their long standing union with the European Union. As a 52% of the UK passed Brexit it began to start controversy on whether they could or should operate by themselves. Immediately following that day, the price of gold spiked up by four percent. Even before the vote, uncertainty had already arose on the future of the European integration process if Brexit would to have been passed. As the outcome stands today, a majority of the UK approved the detachment of the European Union and would now begin to suffer blows to their economy in the short term, medium term and long term. One such impact that came rather quick was the drop in stocks. The exchange rates were a particular hit on large banks of the state. Though those two initial impacts recuperated in a week’s time, interest on government bonds 3 months or older conceived losses that would not be as easy to recover from as argued by Fichtner, Große Steffen, Hachula & Schlaak (2016) “evidence of this can be found in the prices of credit default swaps (CDS) for gilts, which have sharply increased compared to those of German government bonds” (p, 302). Another prediction leads to believe that government financing costs in particular are to rise in the medium

The current international system is characterized by growth in globalization hence regional integration is becoming a common phenomenon in most parts of the world. As a result of states becoming more interconnected, most of them have opted for regional integration so as to enhance trade between states thus boosting economies of the states as well as the regions as a whole. Besides free trade, regional integration has seen to it the elimination of trade barriers, free movement of goods and people across borders, regional co-operation in issues to do with peace and security within the regions among various other benefits of regional integration. One of the regions that has grown as a result of regional integration is the European Union (EU), which is an economic and political partnership composed of 28 European countries. This paper will focus on the EU and give a theoretical analysis of the Brexit while giving lessons of integration and liberalization based on the Brexit.

On 23 June 2016, The United Kingdom European Union membership referendum took place in the UK and Gibraltar. The result was decided by 33,577,342 eligible voters. 17,410,742 voters voted to leave the European Union; 16,141,241 voters voted to remain in the European Union. On 24 June 2016, Jenny Watson, the Chief Counting Officer, announced the final result of the referendum—leave. This was a breaking news, and it caused a global attention. Countless information and news were reporting by social media and networking. David William Donald Cameron, Prime Minister of the United Kingdom issued a statement in 10 Downing Street that he will resign in October, and he would continue to service to the British public in the coming weeks and month. He hopes that the new Prime Minister leads the UK toward a right direction under the new situation. Meanwhile, the global economy and international currency were affected by the referendum. Global stock markets were falling down drastically and the British Pound did drop from $1.50 to $1.35, which was the lowest value since the 1980s. Investors also lost heavily. For example, many financial analysts think that like Warren Buffett and other successful investors probably lost billions of dollars on average after the vote. In April 1975, there was a similar referendum held in the UK. At that time, 67.2 percent of voters approved that the UK ought to stay in the European Union. After forty-one years, the result is different. The desire to

Fluctuations in the economy are normal anywhere in the world and have gone through multiple series of highs and lows ever since scholars began the study of economics. One of the most well-known economic booms occurred when the Industrial Revolution began in the United Kingdom. Coincidentally, the recently announcement of the exit of United Kingdom (UK) from the European Union (EU) caused a great deal of uncertainty among investors across the world and this affected the economy globally. It is not surprising to see that events happening in Europe can greatly affect the stock markets around the world. The exit is confirmed after a referendum was held and passed nationally where the count of votes to exit was higher than to remain in the European Union. An exit from the EU is a first of its kind and will create a high degree of fluctuations in the economy especially during the process of withdrawal. This will nonetheless disrupt the European Commission’s Capital Markets Union (CMU) plan which is what this paper is about. The European Commissions introduced CMU to integrate capitals throughout the EU allowing the European Commission to mobilize funds in attempt to build a more efficient Single Market. UK’s exit will likely have negative impacts on the CMU’s plan since there will have to be restructuring of the plan depending on the negotiations of exit between UK and the EU. Until we know where the UK and