Insight: How Brexit Affects You​

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The UK’s decision to leave the EU sent shockwaves across Europe last night. Aside from Greenland, no country has ever left the EU before. After months of bitter campaigning, Leave won in a surprisingly comfortable fashion. The results have shown – once again – that pollsters, bookmakers, traders and pundits should all be taken with a rather hefty pinch of salt. The results have also shown that the country is intensely divided, perhaps as never before. Scotland, Northern Ireland and London voted decisively for Remain, whereas the rest of England voted for Leave. The young voted predominantly for Remain, whereas the old voted predominantly for Leave. As well as managing a period of extreme economic and political turbulence, the next PM faces the unenviable task of uniting both the whole country and his own party.

So, what happens next? Although the vote was for Leave, the UK is still a full EU member. This means that EU law still applies in the UK and British citizens still have the same rights and status in the EU (and vice versa). This will be the case until the UK and the EU negotiate and conclude a withdrawal agreement, which sets out the terms of their future relationship – covering issues like trade and immigration. This will take a minimum of two years, but could take much longer, meaning that the UK could still be in the EU for a few years (albeit as a member state negotiating its exit).

The consequences of Brexit very much depend on the type of deal that the UK is able to negotiate with the EU. It is impossible to know exactly what Brexit will mean for UK citizens currently living in the EU, UK citizens who wish to travel and live in the EU in the future and UK businesses who trade with EU companies, until the nature of the withdrawal agreement is clear. Some experts argue that it is in the EU’s interests to give the UK a good deal, as we are a crucial economic partner. If this is the case, the post-Brexit reality might not feel that different. However, others argue that the EU might want to ‘punish’ the UK for leaving, as a way of deterring other Eurosceptic movements across Europe from pushing a similar agenda. If this is the case, life post-Brexit will feel very different for millions of people.

One thing is certain: Brexit will have far-reaching and long-lasting consequences, for both the UK and the EU. It could trigger a second independence referendum in Scotland, it could lead to the imposition of a hard border between Northern Ireland and the Republic of Ireland and it could even lead to the disintegration and collapse of the EU itself.
Many people will be wondering what the impact of Brexit will be for their personal finances, as well as the wider economy. Here are a few things to consider:

1) Because the value of the pound has fallen sharply and is likely to remain relatively low, the cost of goods which are imported from abroad will increase. This means that products such as petrol, food and wine will all become more expensive. The chairman of the Petrol Retailers Association, Brian Madderson, has predicted a rise of 2p-3p per litre.

2) The fall in sterling also means that British holidaymakers will get less bang for their buck this summer. To put it simply, euros and dollars will become more expensive, and all those who exchanged their holiday money before the referendum will be very happy indeed.

3) If the economy is sluggish and suffers in the way that most economists predicted, then interest rates would probably be cut, as a way of stimulating the economy. This could mean lower mortgage rates and cheaper borrowing. Although it cannot be said with certainty that the Bank of England will opt to go down this route – at this early stage, things are unclear.

If the economy does take a sustained hit due to Brexit, then living standards are likely to stagnate and jobs will be lost. This would be caused by lower levels of inward investment and lower levels of UK-EU trade. Again, much of this depends on the nature of the deal which the UK strikes with the EU, as well as the political stability in the UK.

At this stage, it is impossible to predict what this deal will look like and how the economy will be affected. Nonetheless, in the short-term it can be said that prices will rise, foreign currency will become pricier and interest rates will probably be lowered to 0%. Amidst a cloud of uncertainty one thing is for sure: the effects of this momentous will be felt for years to come. Brexit marks a seismic alteration of the political and economic world as we know it.

12 comments on “Insight: How Brexit Affects You​

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Thank you for this article, Danny Lord. I am indeed surprised by the result, as I voted to remain in myself. I knew there would be a difference between London and most of the rest of England but it was more than I thought. I live in the greater London area.

I think that seemingly uncontrolled immigration (of non-skilled workers or unemployed) and the prospect of nations with not a very good record of human rights, such as Turkey, joining soon were a major factor, and conveyed some fear amongst many people. But in reality, it would probably be at least a generation before Turkey would even satisfy all the major requirements. Many of the electorate did not even consider how the economy would be affected, although I’m sure many were warned by their employer. As you have said, it does affect trade between member states of the EU and, of course, does affect exchange rates as well as anyone wishing to live/work on the continent. Also, some of our employees’ conditions at work that workers have taken for granted were granted by the EU, so they would no longer be binding once we leave.

I believe that the supposed £350 million per week that we pay for being a member is exceeded by what the EU has put into, for example, hospital research, but I’m not sure of the figures. As you have said, Danny, we’ll just have to see what the implications are…

karen.young42@hotmail.com
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I don’t think it is accurate to say “The UK’s decision to leave the EU…” as there has been no decision to leave. Such a decision will require an Act of Parliament, and with 75% of MPs wishing to remain, the legal situation may turn out to be very different. The referendum was simply an instrument of people’s wishes, nothing more.

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Thanks to the string of politicians who took us deeper and deeper into this ungodly mess! Maybe we should become increasingly more self reliant, import less and have a prolonged drive to stimulate our own industries, starting with farming and fishing.

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Danny Lord’s insight is quite informative, honest and without bias. It is a pity that our politicians couldn’t have informed us of the possible consequences in a similar vein rather than using scare tactics which actually gave us no information at all with which to draw conclusions

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When we joined the COMMON MARKET it was a trade agreement. Membership of the EU sneaked in via the back door and we were never asked if we wanted our laws to be overriden by unelected Brussels bureaucrats. The United Kingdom stood alone in 1939 and all our world wide allies came to our aid in the fight for freedom! Angela Merkel appears to have been achieving what Hitler never could – subjection of the British people. I was very sorry to see David Cameron resign. He steered this country back from economic disaster in difficult circumstances in a manner which I doubt many others could have done. He fought for what he believed was right for te British people and I think he will be sorely missed

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The ordinary man has had enough of being lied to and not listened to by politicians. This vote though possibly not the right one, is a clear message that there is more to Great Britain than London. To hear the Labour Deputy Leader say ” We must learn to listen to the people” is the root cause of this result. If politician were not listening they are in the wrong job.

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A weak pound is good for exports.
Unelected Juncker and cronies wanting to make an example of Britain and punish them for leaving EU. One of the great reasons we have left because of people like him.
Germany will have huge say in our future deal.
I dont think they will want huge tarrifs put on their exports to UK.

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If the European Union hadn’t been so stubborn in not conceding anything that Cameron originally asked for then this result may have been completely different.
Likewise if Cameron had been more forceful and determined to get what he originally wanted from the EU instead of coming away from a quick weekend with virtually nothing to show for it then again the result may have been in favour of the UK staying in.

The final result has been the direct consequences of both sides not working with each other to find a common working solution.

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If those who voted leave had the chance to vote again,now that they can see the immediate impact, I wonder if they would have voted differently. I think this is really sad for a less Great Britain.

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