What is Brexit and Impact of Brexit on Business Economy


The Brexit News is catching heat as the decision day is ending Brexit, or the “British Exit,” is a June 23, 2016 ballot where the United Kingdom voted to leave the European Union.  

From approximately 2.3 million votes, the mob who voted in favor of the exit won. Following the polling, on March 29, 2017, former President of the United Kingdom presented the withdrawal of Article 50 that bonded  the U.K with the European Union. 


The proposition by the President gave the UK and the E.U time to negotiate an agreement until March 2019. However, recently, the assigned date has been postponed to October 31, 2019.

WHAT EXACTLY IS BREXIT?


As mentioned above, Brexit is an abbreviation for “British Exit”. Both the “left-wing” and “right-wing” Eurosceptics have stood with the proposition of the withdrawal of the bill that kept the United Kingdom within the European Nations. 

All these years, the population of the United Kingdom has been benefiting by being a part of the unified monetary body. But in 2016, when the move of going independent outweighed the interests of staying united, Brexit came into being.

The Brexit polling gave three difficult choices to the United Kingdom. These were:


1) VOTE AGAIN ON BREXIT: 


One of the options with the United Kingdom was to conduct a poll again. If the reports are to be believed, the ratio would have been higher against Brexit if voting were to be conducted again. Therefore, on December 10, 2018, the European Court of Justice stated that the U.K alone could revoke the Brexit application.

2) NO DEAL BREXIT:


‘No deal Brexit’, or ‘Leave with no deal’, implies the exit of the United Kingdom with the demolition of all trades between the UK and E.U. However, such a proposition would block all trades and transport from the UK and, as a result, stores of imported food and stuff would run short. Besides the shortcomings, PM Boris Johnson supported ‘No Deal Brexit’.

3) APPROVE MAY’S DEAL:


Because it wasn’t economically feasible, the UK had no other proposition to make. However, Johnson didn't agree to meet the EU unless it agreed to draw a border between Northern Ireland and the country of Ireland. 

EFFECTS OF BREXIT ON ECONOMY:


One of the most-asked questions on the application of Brexit scenarios was its impact on the economy. How will it affect the economic status of  the UK, European Nations, and other parts of the world? 

There were mixed reactions since those who voted in favor of the move were of the view that it could raise the economy of the UK. On the other hand, those who detested the move were of the idea that Brexit is going to cause a negative impact on the UK as well as the world’s economy on a large scale. 

Here is a briefing of an Economic Impact Analysis since the proposition of Brexit:


1) Immediate Effects on the Economy:


With its implication, Brexit has caused an increase in inflation in the UK by 1.7%. The picture certainly doesn't look good since the Brexit scenario has led the economy of the UK to fall by 0.6% and 1.3% in 2017. 

Not only did it negatively impact business, but it also increased the ratio of the unemployed population. In 2019, the UK government has been reported to expand its business in the EU, but this isn’t the case with the EU, who is gradually reducing investment in the U.K.

2) Impact on Economy in Coming Years:


According to Brexit News, almost all economists stand unanimously with the idea that the Brexit Scenario is about to destruct the United Kingdom’s economic status in the future. Surveys done in 2017 and 2019 show a GDP loss of 1.2 - 4.5% for the UK, along with a 1-10% plummet in the country’s per capital income.

Moreover, with Brexit, the economy of European Nations will flourish in the future at the cost of the UK’s economic status.

The consequences also depend on the type of Brexit scenarios brought into action.
If the ‘No deal Brexit’ comes into action, then the UK will no longer be a part of any trade programmers with EU, which would eliminate the trade- free status with European nations. As a result, the tariff on exports will be raised in Europe, and imports in the UK might shoot up as high as 77% for tobacco and 10% for automobiles. This will, in turn, lead to inflation in the United Kingdom.

Another way to go is ‘Hard Brexit’, but that might be even more detrimental for the United Kingdom’s economy. It will result in a collapse of the real estate sector and also cause a tremendous loss of jobs. According to an Economic Impact Analysis, housing prices would fall, offices will sit empty, and U.K’s name of being a business hub would change permanently.

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