CONSEQUENCES OF BREXIT TO UK

This paper argues that Brexit will have potential negative consequences on the UK’s economy and it is more likely than not to lower its competitive position in global economy. Potential consequences of Brexit on the competitive position of the UK in the global economy According to Rand Corporation (n. d. ), economic analysis indicates that after Brexit UK is expected to be worse-off economically. UK’s failure to establish an open trading agreement between it and EU post-Brexit is anticipated to have negative. (2016), research studies on finance and cars indicate that Brexit will not only reduce EU-related outputs for services and goods but will as well erode UK’s capacity to negotiate franchises from EU-related transactions’ regulations. According to Begg and Mushovel (n.

d. ), several models of the macroeconomic consequences of Brexit ironically project to a long-term loss of GDP for the economy of UK relative to a status quo. It is anticipated that by 2030, the GDP of the UK would be 30% larger instead of the 24 % larger if UK opts to leave the EU. According to New York times (2016), it speculates that UK will have to plan for likely recession effects as a result of uncertainties brought about by Brexit as well as for the higher inflation rate projected due to decreased currency and capital outflow. In this looming danger, the UK would undoubtedly be hurt in short run, nonetheless it is not expected to spell disaster. Moreover, given that its competitive advantage is not founded on one unfettered access to a solitary market, Brexit may as well give it a leverage to negotiate trade deals with new emerging markets which in long run may reward the financial sector with pay dividends.

According to Dickens (2011), profitability can be enhanced either by expansion of into new markets or through enhanced penetration of existing markets all of which UK is capable of exploiting. According to Capital Economics for Woodford Investment Management (2016), Brexit impacts will be a matter for concern on the British property market and City of London. In effect, this encounters with Brexit will definitely hurt the economy thereby lowering UK’s competitive position in the global economy. Nonetheless, the effects may not be that bad to spell disaster. References BBC News (2017). Reality Check: What does “Hard Brexit” mean for UK? Available at: http://www. bbc. , Ottaviano, G. I. , Sampson, T. and Reenen, J. V. Oxford University Press, USA. Independent News (2016). Brexit What is Article 50 and how long will it take for Britain to Leave the EU? Available at: http://www.