Effects of Brexit

WORLD CIVILSATION ASSIGNMENT

GROUP A

SIMIYU MATILDA NANGEKHE

089084

EFFECTS OF BREXIT.

Brexit is an acronym, a combination of the words Britain and exit which is a campaign rallying the withdrawal of the UK (United Kingdom) from the EU (European union). The British electorate will address the question again on 23rd June 2016 in a referendum on the country’s membership, following passage of the European Union Act 2015.Most of the United Kingdom voters are leaning towards Brexit. David Cameron the prime minister of the UK promises to fight for the remain of the United Kingdom in the European union as the advantages far outweigh the disadvantages. The consequences of Brexit would vary depending on the terms of departure, negotiated through a vote and also the prevailing economic climate.

Booming Britain. The UK will be able to break free of the EU protectionist mindset, thus will be able to carry out more trade with other nations without the interference of the EU. This is only possible if Britain reduces the regulatory burden loathed by many businesses and restore control over its borders. Britain must have an immigration policy that no, longer discriminates in favor of EU citizens.

There would be a sharp fall in the sterling pound due to troubled transition. The main assumption is that membership of the EU is not one of the most important issues in British economic prosperity. Breaking away from the bloc would inject deep uncertainty into the UK economy until new relationships with Brussels and other non EU countries are established, creating an unstable period of low investment with the risk of a run in the pound.

It would be a disastrous decision, at worst UK may suffer from recession, the GDP would be 2.2% lower than it would have been if it remained in the EU. At best the UK would have slow growth that is the GDP would be 1.6% higher than if it stayed in the EU. There would be lower investment because a larger chunk of foreign investment especially in financial services and cars has come because of Britain’s EU membership

Brexit would also imperil Britain’s security when threats from terrorists and foreign powers are at their most severe years.

Immigration from European union is currently boosting the work force by around 0.5% a year. This has helped support the economy’s ability to grow without pushing up wage growth and inflation, keeping interest rates lower for longer. Whether UK gains any powers to restrict immigration from Europe will depend on its future relationship with EU. If Britain wanted to retain full access to the single market it may have to keep the free movement of labor between UK and the union. The UK would be freed from many of the European union’s restrictive regulations.