Ease and Unease of Brexit

Ease and Unease of Brexit

Brexit is widely used term across the world today meaning a possible exit of the United Kingdom from the European Union. The UK electorate will address the question again on 23 June 2016 in a referendum on the country's membership, following the passage of the European Union Referendum Act 2015.

What could be the possible financial and social impact of Brexit on UK, EU and rest of the world?

I would start with a funny yet practical impact on Brits

• Cheaper flights will become a history: David Cameron warns that family holidays could be an average of £230 more expensive if UK leaves the EU
• Food Inflation: Brexit would add £220 a year to the Brit’s family's food, clothes and shoe shopping David Cameron claims
• Better Control over laws: UK will have total control on her laws as currently 60% comes from Brussels. UK can tailor her own legislation to protect the human rights
• Social Chapter: The treasury warns that the GDP will fall by 6% and house prices by 18% if UK leaves EU
• Threat to British trade: At present, The UK can sell tariff-free to Europe, the home market, accounting for 44% of the total exports. Leaving would put that at risk and potentially leave thousands of jobs at risk
• Trade Benefits: Leaving means UK is free to trade with the whole world and can strike better deals with China, India and Australia
• Freedom of movement will be gone: Staying in the EU means UK can live, work and move through Europe with ease which soon may be gone and trouble UK. The 1.4 million Brits living abroad in the EU could find movement around the continent more difficult if UK leave. For example, UK driving licences are currently valid across Europe
• Safer border protection: The EU rather than UK has control over who enters the UK meaning UK can't stop dangerous individuals entering the country
• Loss of Jobs: Unemployment could rise by 820,000 and average wages fall by 4% in two years if UK wants to leave
• Savings in money: UK sends over £250 million to the EU every week. Leaving means UK can choose to spend this money on things such as the NHS. Also, not having to contribute to the EU budget will mean an immediate cost reduction of around €180 per person in the UK, raising the prospect of tax reductions that could benefit businesses(The NHS is a rare example of truly socialized medicine)
• A second Scottish referendum: Nicola Sturgeon warns Brexit could trigger a second independence referendum forcing Scotland to leave the EU against its will
• The domino effect: Justice Secretary Michael Gove said that if UK leaves the EU others will follow leading to 'the democratic liberation of a whole continent'
• A Brexit result would also send shockwaves through the global economy and is likely to lead to a further drop in the value of the pound. UK’s currency has already weakened ahead of the referendum. (Another viewpoint: Nigel Farage said: “Even if sterling is to fall a few percentage points after Brexit, so what? The point is UK has a floating currency and it will be good for exports.")
• The vast majority of small and medium sized firms do not trade with the EU and British farmers would lose billions in EU subsidies
• If the door shuts to immigration, rents are likely to fall, not so good for landlords
• For Brits, holidays could become pricier, as sterling has fallen and for rest of world pound depreciation means cheaper holidays at UK
• Legislation: UK wouldn't be bound by the European Parliament, which is considered by many to be undemocratic. This is because its Commission which proposes legislation is not directly elected

What could be the after effects of Brexit?

It would be really tough and uncertain to judge what would follow after Brexit as rest of the world’s reaction is yet to be seen. However, few expected short term action plans could be that UK would start lengthy talks to renegotiate EU agreements and build new trade links with Europe and the rest of the world. There are concerns these negotiations could be made more difficult because EU bosses would want to discourage other countries from following suit by also leaving the EU. Cuurent PM, David Cameron may be asked to resign as he would have failed to save Project Fear

Secondary research based upon facts mentioned on http://www.express.co.uk/ and other prominent sources