Financial About Brexit

4FINANCIAL ABOUT BREXIT

Financial About Brexit

Financial About Brexit

British Exit commonly referred to as Brexit entailed the referendum conducted on June 23, 2016 by British citizenry who voted to exit European Union. The Referendum was a historical one and was celebrated widely by the Eurosceptics while at the same time shockwaves were felt in the entire global economy. The global economies and currencies such as the pound recorded significant fall among other currencies. Most businesses in Britain have expressed their concern because of the uncertainty that surrounds this decision. Policy changes always create winners and losers and therefore some effects of Brexit may be far reaching while others short lived (Foster, p. 1). The impact of Brexit is highly a result of the relationships with the Eu that is likely to proceed. This is because political benefits in policy independence may be economically damaging as seen in falling of the pound and the leaving of multinational businesses.

The impacts have also been experienced in banking and financial services because the City of London is the primary bridge to the European single market while the London Stock Exchange is a leader in the listings of international platform in the securities world. Legislations in the financial services and the banking industry are established from the European Union law and Brexit has had significant impacts on this. The value of the pound collapsed immediately after the vote against the dollar leading to increased import costs making business reevaluate their investments due to the increased chaos within the market and their financial positions which have now been at stake (The Guardian, p. 2).

Additionally, large multinational companies are leaving Brittier and have warned of job cuts coupled with reduced profits following the historic Brexit vote. For instance, multinational companies Ford and Airbus are some of the business reviewing their operations in the UK because of the possible serious effects for the workforce in the city (Foster, p. 2). Thousands of employees risk loosing their jobs as some of these companies could relocate the businesses. Others include the JP Morgan Investment bank and Toyota car manufacturers who have engaged in UK investment reviews due to the compounding issues surrounding the Brexit vote aftermath. Foreign financial firms argued that it would not be beneficial to invest in Britain after the vote with Goldman Sachs and led in campaigns reflecting the consequences of the decision to leave EU.

Brexit meant UK businesses would no longer subscribe to the European Union competition law whose activities have effects on member state trade. Therefore, Brexit impacts are evident particularly n British businesses and the severe effects are felt across multiple channels through the falling pound against the dollar and leaving of multinational businesses. This is because the new relationship between the EU and Britain remains uncertain and would is likely to compound the problems already facing businesses. Multinationals are facing challenges in their supply chains, export, policy interests and investments among others necessitating relocation decisions and warning of reduced profits and loss of jobs (Gandel, p. 2). Large corporate have been adversely affected and the cost of raising finance is likely to increase with the loaming uncertainty encompassing the new EU and Britain relationship after Brexit. The European Union has experienced huge political impacts and internal political dynamics have been disrupted because of political contagion risks that have not only lead to loss of influence but also esteem globally.

References

Foster, A, 2016, What is Brexit and what is Going to happen now that Britain has Voted to LEAVE the EU?, Express, accessed 6 September, <
http://www.express.co.uk/news/politics/645667/Brexit-EU-European-Union- Referendum-David-Cameron-Economic-Impact-UK-EU-exit-leave>.

Gandel, S, 2016, London to Lose Tens of Thousands of Jobs After Brexit., Fortune, accessed 6 September, 2016, <
http://fortune.com/2016/06/24/london-brexit-jobs/>

The Guardian, 2016, Multinationals Warn of Job Cuts and Lower Profits after Brexit Vote, accessed 6 September, 2016, http://www.theguardian.com/politics/2016/jun/24/brexit- vote-business-leaders-call-for-urgent-action-to-shore-up-uk-economy