The decision of the UK leaving EU, named as Brexit, can influence many aspects of the UK’s economy. A referendum, according to which, UK will completely cut off all the relationships with EU. It has been a long debate about the pros or cons for the UK to be a member of the European Nations.
The decision is crucial and the consequences will be of great cost especially for the economy of the UK. For Britain, Europe is the most important export market. Changes in relations between two can greatly impact the trade conditions for the UK. Not only this, but Europe is also the biggest source of foreign investment in Britain. The major impacts on the economy, especially trade, are threatening the leave plan of Britain every day.
- Many companies in the UK can sell their goods anywhere in the EU without any taxes applied. Brexit will steal this advantage from them. British consumers can easily import goods as well without any tariffs.
- In the absence of any deal agreement between UK and EU, the UK will have to follow the rules of the World Trade Organization on tariffs.
- Tariffs would raise the costs of exports which would hurt exporters as the goods and services became expensive in Europe.
- Not only exports but Brexit will raise the price of imports for the UK like food from the EU, creating shortages of food. Eventually, higher prices of imports will create inflation and it would lower the standard of living for UK’s residents.
- Brexit could be disastrous for the UK’s financial centre. About 5,000 jobs could be lost in London which could lead to a disastrous real estate collapse.