“How ‘Brexit’ Could Change Business in Britain”
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A worker at a Nissan factory in the UK, as they are trying to make deals in order to avoid negative Brexit impacts
Summary: The Brexit is an ongoing event that has been occurring for almost 2 years. It is the UK’s decision to leave the EU so that they can have a better control over their laws. The UK citizens voted for it on June 23, 2016, where a majority voted to continue with the Brexit. The New York Times article “How ‘Brexit’ Could Change Business in Britain” describes how the Brexit will change national trade, markets, and economy, and how it will affect Britain’s relations as far as trade and business with unrelated organizations and other countries. It also describes how UK citizens truly do want the Brexit to pass, as seen by government official, Mrs. May’s, arrangement of deals between the UK and other nations to ensure that the transition is smooth. (https://www.nytimes.com/interactive/2016/business/international/brexit-uk-what-happens-business.html?mtrref=www.google.com&gwh=1A5966C09792970FDAD9A75CE075AD3E&gwt=pay)
The article describes the initial discussion of the Brexit in 2016, where UK citizens voted on the Brexit and it won, meaning that if the UK followed through they would exit the EU. There are some current financial consequences already occurring. It can first be viewed in the large drop in the FTSE index after the June 23 elections, meaning that the top UK companies stocks are overall dropping, indicating a lowering economy.
The FTSE Has experienced continuous drops since the discussion of the Brexit
The New York Times also noted that the pound has dropped 12% and reached its lowest value in
31 years! Its ultimate effect on the UK is inflation, as it is increasing the relative cost of imports.
The UK Pound to dollar index shows the worsening UK economy since the vote on the Brexit
Reaction: This drop in economy has not been all bad, as it has influenced trade between larger foreign companies (as it is cheaper), such as companies in Japan and China. However, this uncertainty in the future of England’s economy has caused harm in Business. Over 10,000 financial jobs are being moved away from Britain, and overall profits for small corporations is expected to lower once the UK leaves the EU. Why not larger companies? Many larger companies are expanding in Britain due to deals that the UK has made to with them in order to maintain a stable economy. However, it is unknown how many funds will be necessary to keep business in the UK and the greatness of its effect on UK citizens and economy.
So what will happen from here regarding business and economy in the UK? Will they leave the EU or turn around or decide to stay? Based on the article, I predict that the UK will end up leaving the EU because of the support of the citizens and government officials such as Mrs. May to pass the Brexit. I believe that business and economy will drop dramatically amongst smaller companies in Britain, leaving its citizens to buy from larger companies who can afford cheaper products. This will ultimately also drop other prices in the UK such as housing prices because it will be more difficult to make money when more businesses in the UK are international, and some companies are pulling thousands of employees out of the UK. In order for the UK to make all of the deals to continue business, I think that they will either need to borrow money, print more, or increase taxes. All 3 of these have a negative, because it will be hard to borrow money right after having left the EU, printing more will only increase the rate of ongoing inflation, and increasing taxes would hurt small businesses and the mid-low class, as well as scaring large businesses out of deals with the UK. Overall, there will be consequences to leaving the EU, but will it be worth it towards the citizens in return for larger control over lawmaking? That is extremely subjective, and with all of the constant changes and discussion currently occurring with the Brexit, truly only time will tell.
Connection: This connects to what we are currently studying because it discusses the positives and negatives
of the EU, which we studied in our WWII unit. It specifically focuses on one of the main nations,
the UK, and their exit of the EU, which is huge because it shows a change between international
relations and the importance of these relations to different countries. The UK’s willingness to
leave the EU reveals that it is not as crucial as it was in WWII because tight alliances are not
needed away from a time of war (as shown by countries mainly forming tight alliances after
the start of WWI & II), and that it is instead more important for some countries to be able to
make independent decisions. It also relates to the inflation taking place in Germany as the UK
now knows that they need to avoid that issue in order to maintain stability. The UKs exit of the
EU is a risky one, but it may be worth it towards the citizens to sacrifice these relations with
the EU and companies (for business) in order for them to be more independent.
Questions to Consider:
1. Will the Brexit end up helping the UK or throwing them into a financial crisis?
2. Will the UK follow through with the Brexit to begin with?
3. How will the Brexit change the price of imported and exported UK products & will this affect international relations?
The signs of the effect of Brexit seem to be dire after the huge drop of the pound and its effects and causing British business to be bought out. At this point their is no turning back and Britain can only hope for the best. However staying in the EU would be far worse. Britain has to shoulder a majority of the burdens of the EU and tolerate huge amounts of immigrants coming to Britain for jobs due to their link to the EU. Also the EU is on the verge of collapse with countries such as Italy on the verge of bankruptcy. If Britain were to stay they would have shoulder some of the economic burden and help bail countries out. Though Br exit looks dire it is still much better than staying in the EU so Britain will follow through.(article with facts:https://www.washingtonpost.com/opinions/brexit-would-be-hard-for-britain-staying-in-the-eu-would-be-worse/2018/12/14/18932c5a-ffd4-11e8-862a-b6a6f3ce8199_story.html?noredirect=on&utm_term=.54cdeaee4313)
ReplyDeleteThe EU was created after WWII to create economic stability, in efforts to decrease the chances of war between European nations. At the moment, this doesn’t seem to be a big concern of the UK. As part of the EU, countries follow rules regarding transport, consumer rights, the environment, and phone charges. In order to stop Brexit, the UK would have to go against the law, however, there are ways Brexit can be delayed. This could happen only if the leaders of the other countries in the EU agree. According to BBC, Theresa May has put the date of Brexit into British Law as the 29th of March. Since the majority of the population of the UK has voted for Brexit, and the UK actively set a date, it seems that the country will follow through, despite evident economic decline. https://www.bbc.com/news/uk-politics-32810887
ReplyDeleteConsidering the amount of effort and time that the Brexiteers currently dominating the UK's government are putting in, we will see results from the Brexit. Once the Brexit completely occurs, economy is going to start out shakily and there is going to be a reasonable amount of fear among the UK population. I think with the UK's current committed state, once they accomplish the brexit they'll be looking forward to the huge future that awaits. The UK has spent too much time so far on the brexit to pull out quite yet. Naturally imported and exported prices are going to experience an enormous spike directly following the Brexit, however, the UK's economy is going to eventually stabilize from that shock and mess. In terms of international, they're going to have to be extra careful due to the dangers of scaring away other countries with high prices. I don't believe that Brexit is going to be 100% unsuccessful tho I am still skeptical, I still hope that it can go even reasonably smoothly and create a better and less turmoil-full situation.
ReplyDeleteI believe Brexit will drastically positively affect the UK and negatively affect the EU's economy. For Europe, now what Brexit has been announced, the EU's currency, pounds, has started to drop in value. From what I see on the graph, it looks like the value of pounds have started to drop since the UK advocated for Brexit. From the graph's pattern, it seems to be dropping down even more, and I expect it to keep dropping down until the end of March, which is when the UK will officially leave the EU. By then however, I expect pound's value to reach its lowest, but after the UK officially leaves from the EU, I expect the value of the currency to recover. As for the UK, I think Brexit will be beneficial for them as they get to start a whole new economy. This allows them to set the value of their currency for any desire they want. Additionally, this allows the UK to be independent, which means that the bad decisions of other countries won’t necessarily mean recession for their economy as it did when they were in the EU. For whether or not the UK will follow through on Brexit, I believe they will as Brexit is beneficial to them and that it may in fact be detrimental if they decide to stop Brexit now, which is about 2 months from now.
ReplyDeleteI agree with you, Eion, because one large factor of the economy's downfall is all of the chaos presented with the Brexit, such as trade and its affect on small businesses. The reason for the Brexit may provide promise for the UK in the future, one of the main factors being its independence. I disagree that it will benefit the EU as much because they benefited from trade with the UK more than the UK got in return (based on the article I used for my blog). It will also be interesting to see how the UK's relations with countries within the EU will change after the finalizing of the Brexit, and how if may effect larger global events as it once did in the early-mid 1900s. One question I still have, however, is if small businesses will be able to recover by the time the chaos is over, or will it be too late for them to coexist with the masses of large companies trying to take advantage of this opportunity?
DeleteBritain’s exit from the UK will cause both the UK’s and Britian’s economy to fall, as it fell significantly when it was voted for by the majority of britons in 2016, meaning that an actual break from the UK would cause it to fall significantly. I think that both economy’s would be hit hard, but would recover relativelty quickly because of the money that is being poured into the UK and Britain. As of now, Theresa May faced her biggest defeat by parliment while trying to pass a plan to exit the UK (https://www.nytimes.com/2019/01/21/world/theresa-may-brexit.html). Yesterday, she tried to pass a similar plan, but lawmakers in the Uk were still unhappy. I think that Mrs. May will push lawmakers until the final day of March 29 to make a deal, as otherwise, there wil be no deal and Britain will not leave the UK until another vote takes place. Products being exported from Britain are getting cheaper, and while that is good for the rest of the world, it isn’t for Britian itself. Another hit on Britain’s economy is the more expensive import costs. But this is somehwat stablized by deals with large companies to stay and invest in Britain. Brexit can impact internation affiars by forcing Britiain to place tarrifs on imports to maintian it’s economy.
ReplyDeleteThe UK’s decision to formally leave the EU and go through with the Brexit seems confirmed, as, despite the people’s growing concern for the process of leaving and increasing financial instability, this article itself pretty much guarantees that the Brexit will occur on March 29th of this year. According to BBC, the Brexit date itself has been put into British Law by PM Theresa May, therefore the process of even just delaying the date would require agreement from all 27 other EU members. The chances of the remaining EU members delaying or destroying the Brexit seems highly unlikely, as the leaders have made it clear according to Aljazeera that they will no longer negotiate with the UK and its Brexit terms. Despite the almost impossibility of a delayed or canceled Brexit, British parliament still spends a lot of time arguing on the logistics of the bill. I feel that both the UK’s parliament and people must accept the reality of the Brexit, and subsequently deal with the problems leaving the EU will bring, rather than argue on whether or not it will occur. The date is set, and the UK will be leaving the EU on March 29th, and the demonstrated financial problems are clearly occurring. It seems that the affected businesses themselves have already made a lot of changes in order to adjust, like setting up international locations and highering natives. It is time that all within Great Britain must too begin bracing for the inevitable changes that the Brexit will bring, rather than argue over the horror of it.
ReplyDeleteUK's decision to leave the EU will only cause a financial crisis. The price of the pound has already dropped, and economy will only continue to drop if UK leaves the EU. Smaller companies will fail to survive, resulting in everyone relying on the bigger, international companies. However, it seems the majority of the public wants Brexit to pass, so it most certainly will happen.If Parliament refuses to endorse the exit terms, the U.K. will be on course to fall out of the EU with no agreement on March 29 - an outcome British authorities say could deliver as much as a 25 percent hit to the pound and a 30 percent hit to house prices, risking a recession. https://www.bloomberg.com/news/articles/2019-01-22/u-k-parliament-moves-closer-to-stopping-a-no-deal-brexit The import and export products are going to wobble in the prices, but eventually stabilize as Britain slowly adjusts to the change. Internationally, I believe trade with Britain will continue and there will be no major impact.
ReplyDeleteThe idea of Brexit came about during the immigration crisis in the EU. The people of the UK felt that their sovereignty over their country was at risk. This is a matter of nationalism for people in the UK - they believe that they should have control over their borders, economy, and politics. Being part of the EU would force them to basically subsidize the debts of the poorer EU countries, especially Greece. The UK also wants to be free to make their own trade deals with other countries, rather than being limited by the EU. However, because of the strong opinions of the public, the Brexit is rushed and many are opting to go with no deal, which would be detrimental to both the UK and the EU. To have a successful Brexit, the British government needs to make sure that the deals made won't harm both parties' economies in the long run.
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ReplyDeleteThere are many people who support Brexit and the moving away from the EU and the possibility of it happening because of that is very high but the real problem is how the UK will handle it economically. With the statistics we have right now it doesn't look like it will end up well economically for the UK. If it keeps going at this rate then the only companies that would survive are the big companies but that means people who worked for all the small companies would lose their jobs and have to work at the big companies if able. It would be hard for the UK to work back into the strong country they are right now when apart of the EU.
ReplyDeleteThe UK's decision to leave the EU and continue to go through with the Brexit will cause an increase in financial instability. According to the statistics, it does not look like it is going the right direction for the UK economically. Being a part of the EU would cause debt for smaller countries and businesses which would eventually lead up to smaller businesses to lose their jobs. I believe that the UK should deal with the problems of the leaving the EU will bring and start coming to terms with the idea of the Brexit. The people must accept the Brexit because the changes are inevitable.
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ReplyDeleteThe Brexit will ultimately help the UK but I do not think it will start out that successfully. Any newly independent financial movements always have trouble in the beginning because it isn't familiar. Those working for the Brexit will have to form an organized schedule to maintain financial stability, which can be hard for new movements. But with the support of workers and those in favor of Brexit it can be found to be very helpful and beneficial towards the UK. I believe it will take some time to completely organize and find a system that efficiently benefits the UK but will do so eventually.
ReplyDeleteFrom the stats and situations provided in the article, it appears as if Brexit may contribute to a negative impact in Britain’s economy hence the lowered power of the Pound. Granted, however, new radical shifts in the economy do need time to balance out and stabilize so we will just have to wait and see the trends of the future to confirm. The main positive I see from these economic changes appears to be the ease of other countries to import goods from the UK due to the falling Pound. It will probably have a positive impact on international trade relations but internally, trouble is still set. Also, even with the given examples of success and investment found within the ongoing progression of Brexit, they appear to only be a handful compared to the mass of businesses being risked causing them to relocate. Now it’s all based on whether Brexit will go through or not and from all the effort and insistent campaigning made by Brexiteers, I have little doubt it’ll go through especially since there is a set date unless extensions of negotiations are made. There is a small feeling inside of me that extensions will be made to draw it out for as long as possible to stall the inevitable.
ReplyDeleteAt the moment, it appears that Brexit has not helped out the British economy. In saying that, the British economy has stabilized and no large drops in stocks or value of the pound seems to be approaching. It seems that economically all the hardships have passed, and now the UK needs to manage the political state of Brexit. The initial promise of Brexit back in 2016 seems like a good opportunity for the British people, but now that the effects of Brexit have settled in, it affects citizens' view on the subject. As I do not come from the UK, I can not personally say if the UK will follow through with Brexit, but the drops in economy and change of trade deals will sway the populace and prove to be obstacles for the execution of Brexit. It doesn't seem that Brexit will have much effect on international relationships. Before the proposal of Brexit, the UK was a economically stable country, and it still is. Brexit didn't and isn't going to make the economy collapse it will just be a slight "hiccup" for the already growing economy. The UK will still be able to keep their sides in trade deals and so far, there haven't been any international ties severed as a result of Brexit.
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