A lot of speculation has been made ever since the historic Brexit vote and what will it bring towards the countries affected. Whether you are a local investor or an investor outside doing foreign trade, you should be aware of how it will impact your profits.
There may be a lot of turmoil going on since it’s possible that a lot of companies will leave the United Kingdom for Europe. The impact of Brexit on the financial markets started in June of 2016 when the British have voted to leave the EU. For more detailed information on how everything started, you can check out this interactive timeline:
Brought to you by Daily FX to discover how Brexit has affected the markets from 2016 to present.
What will happen to the UK economy? The experts have weighed in and predicted that it would suffer an instant and significant fall – comparable to the global financial crisis back in 2008. This was the time when the stock market crashed and seized up due to the result of operational separation and loss of confidence in the payment and settling system. Now, the UK economy is already experiencing a slow-paced structural change. Foreign investments are already falling and this is one of the major contributions in the economy’s already disappointing levels of investment.
It will also be a whole lot harder to be able to maintain global standards and norms and even pursuing international policy coordination and harmony. Tax and regulatory financial buying and selling of assets will become increasingly common. Decisions made about government spending, taxation, redistribution of income and money supply or economic policymaking, will become a tool for addressing real or even imagined national security concerns. Whether this approach will affect the existing military and political arrangements still remains to be seen.
Last but not least, there will also be a change in how the countries affected by Brexit who are looking to seek structure to their economies. Before, Britain, as well as other countries are open economies that can leverage their local advantages through links with Europe and the whole world. However, now that it will become a large and closed economy may just seem attractive for those countries that do have that option.
The Brexit process may seem to look like a messy and domestic dispute for the rest of the world but it also has important lessons regarding the global economy. From the way it looks, growth and liquidity will become even more uncertain than ever. Whatever may come after the completion of the Brexit process, we should all prepare for the unexpected.
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