Did you know that the Great Britain was a member of the European Union? Yes, it was a member together with other 27 countries, including Belgium, France, and Croatia. Their historical exit, which was preceded by the referendum in which ‘exit’ won by 52% against a 48% to stay. BREXIT is the shorthand for the initials to the words that were explaining the exit of the United Kingdom from the European Union. It is a link of Britain and Exit to get BREXIT. The changes have had a tremendous effect on Europe. This is known as the Brexit effect.
Some factors stood out as the reasons behind the vote for leave, some of them include;
– Uncontrolled immigration.
– End of reforms.
– A united European Union army.
With Britain being among the world’s strongest countries economically, their exit from the EU was accompanied by negative effects which are being felt all over including the international markets like India and Japan, Europe and the US. Some of these effects with dire consequences include;
There was a decrease in housing demand in the United Kingdom. Right after the voting on June 23rd which saw the exit of the Britons from EU, there has been a decreasing demand for houses built for sale. Moreover, the housing sector has recorded a decrease in price growth of homes during the period after Brexit.
Having been a partner in the EU, the UK will benefit very little from any future changes within the EU. Also to be noted is that they will be contributing much less to the EU. This is because of the reduced trade between them and the additional tariff barrier that are imposed on trade. Initially, UK benefited from reduced business benefits, thereby making the cost of goods and services cheaper in the UK.
There was an income loss in all the EU countries with the UK recording the largest at almost twice as much as all the EU countries combined. By exiting the EU, the UK is left with a few options for new trade partnerships with other nations including the US and China. Essentially, it controls a minuscule percentage of the global market. This impact translates to a general decrease in the income of the UK’s economy.After the exit, it is a fact that trade between the UK and the countries still within the EU has been reduced. Moreover, the countries which the UK will seek to trade with will register considerable income thereby improving their GDP. Good examples are Turkey and Russia. On the other hand, those countries which were former partners with the UK before the Brexit will record considerable reduction in income, this is due to the cut in trade between the two. Good examples of the losing countries are Belgium and Netherlands.
On the share index trading point, there was a hugely notable loss as a huge amount of up to $2 trillion swept off the market. This was caused by the uncertainty and negative speculations by stockholders. This must have been caused by the drop in the value of the pound.Statistics obtained in the short run show that there was a dip towards losses in the first few days after the Brexit, later, there was resurgent rise showing that speculations and fears are what caused the decline. Also, the trading trends were worth taking note of.
Former trade partners to the UK before the exit from the EU recorded a significant reduction in income while there was a high-income recording by countries who were not traders in the UK before, the same analysis can be used to deduce the future of global trends.The US and Europe will record significant reduction in income from trade as chances are UK might not trade with them as they remain to be business partners with the EU. Significantly, though, new markets such as India and China are more likely to receive partnership trade deals from the EU because they are currently not doing a lot of trade with the EU.
It should be noted that UK commanded a great percentage of the EU economy, thereby their exit would cause a huge dent on the Eurozone including a decrease in growth of 0.03 percent per annum. However, all in all, the Brexit is ultimately not the worst-case scenario for Britain against other nations with a stable currency. Also, about the crisis due to speculation, the Brexit effect on the other markets both in Europe and without will most definitely depend on their psychology.