This article appeared in The New York Times and was last updated on September 18, 2017, having originally been written on 17th August 2016. The authors of the article are people forming the New York Times Business Desk. Brexit" is a term used to describe the United Kingdom's exit from the European Union on July 23, 2016, when there was a referendum where British citizens over the age of eighteen voted to leave the European Union. The scheduled date for officially leaving the European Union is 29th March 2019. The article assesses the actual and possible repercussions of the economic conditions and business opportunities in Britain post-Brexit. From the Brexit decision from Britain, one learns that changes in international relations have far-reaching consequences more so the economy.
The first effect of Brexit was the resignation of the Prime Minister David Cameron. David Cameron was "Pro-Stay" rather than "Leave" the European Union. 51.9%% of the 30 million people who turned up to vote, were the ones who led to Brexit in a poll that involved 30 million people. Cameron was worried about the economic effects that leaving the EU would have in the United Kingdom. He announced he would resign on 24th July 2016 and he vacated office on 12th September barely a month and a half later. Theresa May, the deputy of the Conservative Party took over and became Prime Minister unchallenged. The political situation in the United Kingdom has had economic repercussions but not to the level that Cameron, his Chancellor George Osborne, and some key figures had predicted.
In the London Stock Exchange, the value of the Sterling Pound has dropped compared to other currencies. The Pound has gone down 15% to the euro and 10% against the US Dollar. On 24th July 2016, the Pound was exchanging at the lowest value in 31 years. However, not all is gloomy. Despite the drop in the value of the Pound the United Kingdom still managed to attain a 1.8% economic growth against all the odds. Among the G7 Industrialized Nations, only Germany has done better with an economic growth index of 1.9%. The unemployment rate has plummeted and at just 4.4%- the last time the UK had such a stellar percentage was 1973.
For the British customers, inflation has risen a bit, but the effects have not been felt that much. Imports have become more expensive by an average of about 8%, but that is hardly high. For a moment manufacturers and investors were worried that inflation would hit the roof and affect the importation of goods processed from other countries. Unilever wanted to remove a number of groceries from supermarket shelves, but the rate of inflation leveled off and thankfully did not proceed with their intention.
The Brexit has proven to be a divisive topic for economists, analysts, and people involved in UK affairs. There are some unanswered questions which make for a proper deliberation. The issues concern EU citizens living in the UK, UK citizens living in the EU nations, trade and international relations between the UK and EU countries and so on. It has only been a year and a few months since Brexit, but already people are anxious. Theresa May wants the UK to break free from the EU, but there are underlying issues which must be addressed first. First and most important, is the amount of money owed to the EU by Britain. The EU wants Britain to repay all its debts first before commencing any step towards leaving the EU. For Theresa May this is a huge problem- on one side she wants the best for the people she represents, and on the other hand, the EU wants its interests fulfilled first. As of the moment, both are focused on not losing so much they are as interested in making a compromise.
Surprisingly, Britain's benchmark share index the FTSE 100 has gone up. The FTSE 100 is made up of prominent multinational companies whose operations are majorly outside the country. What this means is that a weaker Sterling Pound translates to a higher return on investments. The sectors that have been affected the most by the drop in the Pound's value is the housing and property sector which nearly collapsed at the turn of the year. Many companies have bought stocks in some British companies. An example is Qatar Airways which bought more stake in British Airways parent company. The move is investing in the future which could provide more opportunities. On the international scene, the UK has had trade deals and offers from countries such as the United States and Australia. Donald Trump, the United States' president, has talked about opportunities availed to the United States to work together with Britain post-Brexit.
From October 20 Theresa May has been attending a conference in Brussels negotiating alone with EU representatives. Her stint as the Premier could be at a close. In June 2017 she ordered snap elections which took place on the eight. As a result, no party has a majority in the House of Commons which makes her political position very brittle. In conclusion, the article is on-point in looking at the economy of the UK, and the reader is left wondering on the form of future relations of the country with the EU. Additionally, is the question of how much the political situation under Theresa May is going to affect the economy. The answers will significantly impact not just the UK but the whole world.
Times, The New York. How Brexit Could Change Business in Britain. The New York Times, The New York Times, 17 Aug. 2016, Retrieved From www.nytimes.com/interactive/2016/business/international/brexit-uk-what-happens-business.html.
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