Let's talk Brexit - The tangible effects thus far
The vote for Britain to leave the EU on June 23rd has had crippling effects on financial markets, businesses and economies extending far beyond the UK and EU. I’ll start by saying that this post only briefly covers a handful of the impacts of Brexit, since to cover them all would be neigh impossible.
In the UK, unsurprisingly, the value of the pound plummeted to its lowest point in more than 30 years. While on the other hand, countries such as Japan found its Yen value rising further as hot money flows inwards. Housing prices have become volatile and could leave the UK housing market in a potential slump. Banks worldwide have advised clients to err on the side of caution when investing in the UK housing market. In my opinion, one of the biggest issues with this whole palava is the lack of leadership within the nation during these dire times. Both left and right wing parties have found themselves somewhat leaderless and the labour party collapsed when two-thirds of the shadow cabinet resigned. To top it off, David Cameron tendered his resignation after the vote to leave, causing a scrambling fight for his vacant position. More embarrassingly, Britain has been stripped of its triple A credit rating, reduced by a notch (small but significant). Northern Ireland and Scotland are also displeased with the vote to leave as both had majority votes to remain.
Brexit has left the EU in a fragile position which could quite possibly unravel the entire union. With the union’s second biggest economy leaving, the big question that arises is: Will any other country follow the UKs lead out of the union? Brexit is a serious wake-up call and the EU needs to establish some serious reforms to keep it alive. Brexit has also amplified fault lines already present in the EU causing even further damage within the union. There has also been speculation about power shifts within the EU, perhaps redistribution of power from the European commission/council to its member countries.
Brexit has also sparked anti-EU movements globally. France is one of the most Eurosceptic countries and Ms Le Pen, president of the National Front, has been using Brexit to fuel her presidential campaign by taking to the table issues of national sovereignty and immigration. The feelings of French citizens have been amplified by Brexiteers. Germany and the Netherlands will also have elections next year and Brexit could potentially shift the scales in favour of more anti-immigrant parties.