On 23rd June 2016, the people of Britain voted for a British exit (Brexit) from the European Union (EU) in a decision that is likely to transform not only the nation, but Europe forever. But what is likely to happen next?
What is Brexit?
In a historic referendum on Thursday June 23, the British people voted for a British exit from the EU in an outcome that sent shockwaves through the global economy and prompted jubilant celebrations among Eurosceptics around the continent. Following the declaration of the result, David Cameron resigned as the country’s Prime Minister and the British pound fell to its lowest level in more than three decades. In his resignation, the former Prime Minister promised to do everything in his power to steady the ship in the weeks and months ahead but also made it abundantly clear that he would not be the right man to steer the country to its next destination.
Theresa May, the new Prime Minister, has already set out her country’s position in meetings with the leaders of Germany, France, and other key European nations. Mrs. May has declared that there is no turning back and that ‘Brexit means Brexit’ although she has delayed the triggering of Article 50 until some time in 2017. The use of this article essentially commences the timer on 2 years of exit talks before Britain is finally expelled from the political bloc.
What it means for the economy
The victory for Brexiteers sent economic shockwaves throughout global markets with UK stocks experiencing their worst drop since the2008 financial crisis. Britain lost its top AAA rating and emergency measures are now being taken to calm the resultant economic turmoil after the Sterling Pound fell to its lowest level since 1985. However, Bank of England Governor Mark Carney moved in quickly to allay fears by stating that as much as economic and market volatility could be expected as the process unfolds, they were, nonetheless, prepared for it. Mr. Carney also announced interest rate cuts and other measures aimed at preventing the country from slipping into a recession.
Brexit supporters argue that the rest of the E.U. have every incentive to maintain their trading ties with the U.K.- a large importer of services and good- but Europhiles are worried that foreign businesses are less likely to invest in Britain and could relocate their headquarters in the event that Britain loses access to the European Union’s single market.
What happens to immigration after Brexit?
Eurosceptics contend that Brexit will allow Britain to reclaim control of its borders in order to bolster security and curb immigration. This is because Britain will no longer be bound to accept the ‘free movement of people’ from the EU, which Brexiteers claim puts pressure on public services such as schools and the NHS. Additionally, those who are pro-Brexit say that Britain will now be able to impose a points system similar to that in Australia which will allow the country to better fill skill shortages and manage immigration. Those who voted to remain in the EU, however, firmly believe that Brexit will impact the British economy which is heavily reliant on the free movement of migrant workers within the EU such as health professionals.