European Union is a political corporation consisting of 28 countries; it was
established after the Second World War aiming for peace amongst these countries.
On Thursday 23 June, 2016, a referendum (vote) was held in Britain in order to
make decisions on whether the United Kingdom should quit or stay in the
European Union. The votes showed that 51.9% were voted for “quit” with a number
greater than 30 million individuals voting. By the end of this referendum,
Britain made its decision to leave the European Union.
action is now known as Brexit, the shorthand method of saying that Britain
has decided to exit the European Union at the scheduled date:
Friday 29 March, 2019. There were many reasons that led to individuals
supporting the idea of Brexit. Firstly, British peoples fear for fundamental
ascending in the number of immigrants in the United Kingdom. Secondly,
communication between political parties and individuals and politicians had
declined rapidly, and finally, certain people who supported Brexit were
extremely famous to the public such as Boris Johnson.
After the Brexit took place, numerous important
figures that were against the idea of leaving the European Union such as David
Cameron and George Osborne expected an instant economic crisis in the United
Kingdom. In fact, the day after the referendum, the pound depreciated by: 10%
lower than the dollar and 15% lower against the euro; however, the expectations
of an instant disaster were incorrect. Since Brexit, the British economy had
grown by a total of 1.8% in the year 2016, second to Germany only who had an
economic growth of 1.9% amongst the world’s foremost developed nations.
Furthermore, the United Kingdom’s economy grew at the same rate in the year
2017. Inflation has increased significantly by 3.1%, however, unemployment has
decreased significantly as well from 9.4% to 7% according to authorized ONS
The Brexit would lead to less free trade
with the European Union which means that it can possess the ability to decrease
the European Union’s external tariffs. As many people know, the EU works using
free trade among participant countries, however, imposes a major amount of
external tariffs on merchandises, including agriculture. This results in an
increase in prices of certain food imports. Therefore, with the UKs Brexit, it
would be able to discuss better free trade agreements without the EUs external tariffs.
And anyway, the European Unions share in the world trade is descending
significantly as result of the development of emergent economies such as India
seeing these results, numerous people now think that the benefits of the Brexit
outweigh the cons; however, there are several economic consequences that are
linked to this decision that would most probably occur in the long run with
Britain no longer being a participant in the European Union. To begin with,
Brexit would involve massive economic charges for the United Kingdom. The doubt
and disturbance of divorce proceedings would decrease growth and investment.
The permanent separation would lead to a decrease in trade, migration,
production growth, foreign investments and living standards in general. The
would remove the United Kingdom from its
impact over the future EU improvements or transformations which involve the
establishment of a single market in services from which benefit is gained.
Furthermore, according to calculations that
were presented by The London School of Economics, the long-standing charges to
Britain of lower trade in the European Union would reach 9.5% of Gross Domestic
Product (GDP), while on the other hand, the decrease in foreign investment would
cost 3.4% of GDP or an even greater amount. The following points that were
mentioned decrease the possible advances from Brexit. In addition, the removal
of the European Union’s regulation would result in extremely limited benefits,
and that is as a result of the fact that the United Kingdom product markets and
labor force are of the freest in the world.
As mentioned previously, the Brexit would
lead to less free trade with the European Union. As we all know, Britain has
free trade with the 28 country participants in the European Union which enables
the import and export of a massive variety of diverse goods, despite all the
positives mentioned earlier in this essay, when Britain “exits” the EU, this
would make the UK unable to exchange replacement free trade agreements with the
remaining 27 countries which can result in trade diversion and an undesirable
effect on the UK’s export industries.
The effects of Brexit are going to have an
influence on Britain’s economy massively for the upcoming years. Economists are
unsure of the impacts it will hold on the economic future of Britain, however,
in my opinion, I think that the long term economic effects of Brexit will be lethal
based on the research I have done. But who knows maybe they won’t as all these
points are just assumptions that may or may not occur in the future.