The impact of Brexit on UK Positive and negative impact
Later, a referendum was held on 23rd June 2016 for the citizens to make a decision. “Leave” accrued 17. 4 million votes and a 51. 9% of the votes. “Remain” on the other hand had 16. The exit of Britain from the EU has attracted a lot of debate two years later about the positive and negative impact that it has on UK. The paper will discuss this. Background to Brexit The plans for Britain to formally leave EU began on March 29, 2017. UK has been given up to 2019 to discuss how they will relate with EU after Brexit. The talks regarding the issue began in June and raised so many questions about the process because Britain’s constitution is partly unwritten. ” Impact of Brexit on the UK The referendum that saw the UK exit its membership from the European Union had a number of positive consequences on Britain.
Many times when elections are held, the voters always have confidence in the leaders that they vote for and a belief that they will bring change. Though the referendum that led to Brexit is not a routine election, many people had a belief that they would win or lose which would benefit the country. However, the same referendum reveals that the economic outcome of a country is heavily influenced by the decisions that the voters make. Different researchers have made claims about the negative impact of Brexit and others on the positive impact of the decision. In contrast to the Euro and pound the negative impact reversed quickly and it was fair. “London's FTSE 100 fell 8. 7% and closed down 3. 1% on June 24. Germany's DAX fell 10.
Let's look at a scenario where a foreigner has an organization in London and gets offshore products from Romania and Bulgaria. The foreigner cannot manage the organization since free entry into the UK is banned. On the other hand, the owner cannot shift the headquarters to Europe because they have invested so many years creating business relations in the country as well as values. In addition, the owner has to pay customs duties in order to receive products from the EU countries. Jobs The restriction of EU members from entry into the UK means that the UK nationals will have more jobs at their disposal. It is now a major challenge for the Human resources managers to recruit employees from the British workforce only.
Initially, there was competition for jobs in the country due to the availability of a skilled workforce from about 26 countries. During those days organizations only employed the best employees. It exposed the country to acquire mixed and multiple skills. Now the right people for jobs are not available. Macroeconomic effects a) Longer term Research has revealed that British exit from the EU has some long term consequences on their economy. There have been several attempts to model the macroeconomic impacts of Brexit and nearly all of them found a loss in the GDP of the country compared to the growth projections that it would achieve if they were still a member of the EU. A lower GDP for the UK would however not mean a fall in their prosperity.
For instance, if the growth rate of the UK was maintained up to 2030, the economy of the country would sour up by 30%. The losses that the UK will gather in future are relative to this projection. This forecast was made by the treasury. There will also be some costs associated with shifting to a new regime of trade and investment. Another short-term effect is base on the volatility of eh currency and the reactions of the financial markets. The Bank of England had warned that Britain exit from EU could lead to financial instability. The reason for instability is the openness of the UK. However, the supporters of Brexit dismissed the claims indicating that UK could secure tariff-free trading if the UK quits the single market.
They further indicated that Britain had trade deficits with EU and hence it was the mandate of Europe to compromise. Uncertainties over trade for both UK and the European Union The exit of the UK from the European Union could negative impact on trade between the UK and EU. The trade flow between the two parties accounts to a third of all international trade. It is uncertain whether the two will be able to renegotiate and agree on maintaining the "single market. POSITIVE IMPACT Immigration one advantage of Brexit is that it will help to reduce a large number of people in the country which the UK cites to affect the economy of the country. There are many UK citizens working in the countries who will be able to return home and offer the industries with skilled employees.
Brexit will help bring talents home. When the UK was a member of the European Union, they could not prevent anyone from member states of EU to live in the country. In the same way, UK citizens could reside and get employed in any country that is a member of the EU. Low taxes in the past, UK used to spend a lot in the contribution they made to EU. This could have led to a hike in taxes paid. In 2016 alone, Britain contributed 13. 1 billion pounds to the European Union. They also received a total of 4. The ground for leaving the EU was also based on the fact that leaving the political elements of the EU would free UK from being bound by EU laws on home affairs, agriculture, and justice.
Public finance The impact that the Brexit will have in the UK is to save the contributions that they used to make to the EU. The savings that UK will have from the direct contributions to the EU budget are likely to be erased if the GDP loss will be little like say 1%. However, the public fiancés will be terrible if the loss in GDP will be more even though the UK will no longer be contributing to the EU. According to 2014 data that is very much quoted, the UK could make savings of about 280 million pounds every week. Since Britain exited from the EU the government made a promise to maintain security relationships with EU. Attractive investment The Brexit could make the UK an attractive investment center especially if the European project collapses.
Many investors may run to London for safety because of the uncertainties for the European Union. IMPACT OF BREXIT ON REGIONS OUTSIDE LONDON and industries Brexit is said to negatively impact on the regions outside London. The exit from EU means that life will be harder for people outside London. According to earlier reports, household spending will increase by a thousand pounds in a year. This would attract an increase in World Organization tariffs and an increase in the costs of labor. The price of meals at hotels would increase because of the high costs associated with food products. Costs of meals would also go high due to the high costs of labor and because of trade and non-trade barriers. A soft Brexit’ would lead to an increase in households costs about 245 pounds in a year.
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