Brexit is now a reality and every aspect of UK life is feeling the effect of the historic referendum. Now that Britons have voted to leave the European Union, what will happen now that one of its most important member nations has decided to sever its ties to Brussels?
The country is divided with the Leave camp leading by less than 5% against the Remain camp. Now that the British people have spoken, the world has replied with the immediate effects of the vote being felt by the UK’s economy.
Markets React; Pound Vs. Dollar Lowest In 30 Years
The Pound is down 12% experiencing a very sharp drop in the eve of the referendum. According to The Telegraph, the currency has hit its lowest point since 1985, as the country votes to leave the EU.
UK Stocks are also expected to plummet in the wake of ‘Brexit‘. The FTSE is forecasted to open 7.7% lower, down by 489 points. The Euro is also dropping against the Dollar as the consequences of the vote could destabilize the Eurozone.
Forging New Trade Deals
The UK is now free to enter new trade deals with other countries and will possibly leave the EU’s single market. The country will have to find a new alternative to access the European Market now that they are no longer part of the single market.
The IMF has laid out the economic consequences of Britain leaving the EU. According to the Economist, even if the UK can buy more stuff tariff-free, this will be offset by a weaker Pound. The immediate effect on the British economy will resemble those from the 2008 financial crisis.
Cameron Unlikely To Survive Brexit
David Cameron, who has been campaigning heavily for the Remain side will definitely feel the effects of ‘Brexit’. Cameron promised to resign should Scotland vote for independence two years ago.
According to the Wall Street Journal, Cameron gambled by offering the British people a referendum regarding their relationship with the EU. He has lost the gamble and has put his legacy in jeopardy and possibly his job.
Other –Exits, Possible Dissolution Of The European Union
The UK is one of the most important members of the European Union, giving millions of Pounds to the organization every week. With them leaving, this could possibly cause a domino effect as other member nations decide to leave the EU.
Many countries have already expressed their discontent with the EU regarding the migrant crisis. The ‘Brexit’ might embolden these countries into having their own referendum to leave the EU.