Question

Analyze the impact of the Brexit to uk economy. You may include justification from the relevant journal articles to make your argument constructive enough to support your discussion. Based on these point

UK currency market

UK economic growth

UK gross domestic product

Uk foreign direct investment

Answer 1

The exit of British from The European Union is termed as Brexit. The sudden effects of this Brexit are the emergence of new trade agreements and this leads to high rate of tariffs and inflation in the economy, the cost of travel and communication increased than before, constraints on immigration hurt the UK labour force etc. The economy has slowed under this situation and many business were moved there headquarters to EU. There was a high damage occurred in the UK economy. The economic growth comes down from 2.4% in 2015 to 1.5% in 2018. The Brexit eliminate the tariff free status of Britain. This tariff reduction leads to the increasing cost of exports. Thus the economy is move downward. This tariff rates increase the price of imports and this leads to inflation in the economy. High inflation rate reduce the standard of living of the people. The UK companies lost the ability to bid public contracts in EU countries. This results the rise of cost of airfares, internet and phone services.
The currency market was stunted under this situation and the economy move towards a slow down growth rate. The GDP rate in UK falls down with respect to this within short time period. Most of the foreign direct investments were withdraw on the basis of this. There was appreciation occurred in the currency market of UK and this reduce the level of export and thus the total net income from abroad comes down.