Impact of Brexit on UK Economy: Challenges and Opportunities

This report analyzes the impact of Brexit on the UK economy, including the challenges and opportunities faced by the country. It covers the administrative, political, economical, financial, and immigration challenges faced by the UK, as well as the positive impacts such as the ability to make its own laws and regulations and expand global trade relationships.

Business Law and Ethics

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Business law is the set of laws related to trade and commerce, banking and investment,
contracts, marketing etc. It determines the standard of behaviour of the company's Business
ethics is a set of beliefs that is mandatory for the company to follow in order to run its business
successfully. It defines the actions that are right or wrong and should comply with the positive
principles in order to compete in the market and also to gain advantage over other companies.
The report covers the various impacts of Brexit on the United Kingdom and how they overcame
the challenges that they faced post Brexit.
MAIN BODY
What is Brexit?
It is a nomenclature given to the process of the United Kingdom leaving the European
Union. Brexit is made up of 2 words; the first one is British, which also refers to the United
Kingdom and the other one is Exit, which means leaving. On the 23rd Day of June 2016, a
general voting was held in the United Kingdom to decide whether the public wants to leave the
European Union or not which is also known as referendum. 51.89% of the United Kingdom
public decided in favour of leaving the European Union(Portes, 2022). After many postponements,
on 31st December 2020 finally the United Kingdom left the European Union under the
leadership of Boris Johnson and since then it has been an independent country. Time between
23rd June 2016 and 31st December 2020 is known as the transition period in which the United
Kingdom will be considered as part of the European Union and all laws and regulations will be
applied as usual.
Impact of Brexit on United Kingdom
There are many challenges that were faced by the United Kingdom when it left the European
Union under Brexit like Administrative, Political, Economical, Financial, Immigration etc. This
has also been anticipated that the United Kingdom will take a long time to recover from the
worst that has happened to it due to Brexit. The overall United Kingdom economy has been
impacted heavily and is under continuous downfall since then (Pollard, 2021). Worst Nightmare of
the United Kingdom has come true as so many companies and organizations switched their Head

Offices from the United Kingdom to the European Union after Brexit for example Automobile
giants like Honda, BMW, Toyota shut down their manufacturing facilities in the United
Kingdom , Philips moved their place of work from the United Kingdom to the Netherlands
(European Union), Many Financial services giant like JP Morgan, Bank of America moved their
employees from the United Kingdom to various countries of the European Union(Bisciari, 2019). It
has been anticipated by the Government of the United Kingdom that their economical growth
will get hampered by at least 3-8% over the coming 15 years post Brexit. Post United Kingdom
voted to move them self out of the European Union on 23 June, 2016, their currency has been
devalued very drastically from the level of 1.5 Dollar Per Pound to 1.3 Dollar Per Pound which
has impacted increase in export realization and simultaneously increased the price of import that
affected local markets badly. Since Brexit being announced, the Pound has not been able to gain
its pre-Brexit levels yet(Erken, and et.al, 2018.). Post Brexit many products came under purview of
scrutiny, reviews, appraisals, documentation to cross the country’s boundaries which increases
difficulty and also cost of doing cross-border transactions. Various Countries of the European
Union have the Schengen Agreement which nullifies the production of passports and visas to
work across member countries. Post the United Kingdom leaving the European Union, every
worker working either going outside to work or coming to the United Kingdom to work, they
would need to produce documents every time(Brown, 2019). Many Companies working in the
United Kingdom were supposed to follow newly constituted laws which required them to change
their Patents, Copyrights and Trademarks and comply with new regulation after the completion
of the Transition Period. The major Sectors that got impacted in the United Kingdom after Brexit
includes Vehicle Manufacturing Units, Electronic Equipment manufacturing industry and
processed Food industry as all of them were mostly dependent on the European Union for supply
of various parts.
While talking about the worst that can happen to the United Kingdom post Brexit, let’s talk
about some good things that have happened or will happen to the United Kingdom.
The United Kingdom will be able to make its own laws on its own land instead of passing it in
European Union parliament assemblies where the United Kingdom reserved only 73 seats out of
a total of 751(Gamble, 2018). The United Kingdom will be able to create its own subsidy schemes
to help and grow the businesses. By being freed from the European Union, the United Kingdom

will be able to get its independent seat at the WTO (World Trade Organization) that will help
them to build global trade relationships. The United Kingdom has till now signed 70 trade
agreements with other countries including 1 with the European Union which has facilitated the
United Kingdom to expand its business globally as an independent country. Billions of Pounds
will be saved by the United Kingdom government in the form of European Union Membership
fee. The United Kingdom will be able to fully utilize the business capacity with various countries
like the USA, Japan, India, Australia etc which they were not able to do while being part of the
European Union(Tupa, and VOJTOVIČ, 2018). Consumers will be given relief in Taxation by
removing European Union VAT while it reduces the cost of local goods and makes living better.
New regulations have been introduced under the withdrawal agreement in which citizens
of either the European Union or United Kingdom can decide whether they want to stay in the
same state or not, which means if they want to move out of their state/ country they have to apply
for citizenship with their respective country (Latorre, and et.al, 2019.).
Covid -19 and Brexit
Covid-19 is one of the greatest pandemic and has created a huge amount of negative
impact on the economy of the countries. Lockdown was imposed in various countries and many
businesses were affected due to this. On the other hand various restrictions were also imposed by
the government which created barriers for many companies to carry on its operations due to strict
regulation by the government(Fernández,and et.al, 2020). It was also a problematic issue for both the
sides to decide how to migrate their workforce, how to shift business bases from one place to
another, how to financially stabilize the economy and sudden covid-19 hit made it more hard for
them to recover from it(Tetlow, and Stojanovic,2018). It was also proposed by the European Union to
postpone the transition period by a year or so but the United Kingdom denied it and proceeded
with the actual date of 31st December 2020.
From the above analysis it can be observed that due to Brexit, there have been various
positive and negative impacts that the United Kingdom has faced. The United Kingdom is now
focused on new subsidies policies that will allow flexible support to aerospace, changing their
ways to operate and taking various measures to drive economic growth. The United Kingdom
has made very effective Laws and regulations taking into consideration the road map as to
how they will be able to regularize the economy and will be able to stand on its own feet. But
just making laws will not be called justice to the people of the United Kingdom. Implementation,
amendment, support from the people are some factors that will determine as up to what degree

the United Kingdom had succeeded. It was also predicted that the economy of the UK will
improve slowly after Brexit (De Ville,and Siles-Brügge, 2019). The impact of this will depend upon
the future trade relation of the UK with the European Union. The other point to consider is the
Foreign direct investment that directly contributes to the national income of the country that
helps in providing the funds to the companies for their expansion. It is also observed that two
fifth of the foreign investments come from the European Union and leaving the EU can have a
negative impact on the FDI of the United Kingdom. It can be said that UK has been impacted
after leaving EU but have somehow overcome the barriers but the initiatives taken by United
Kingdom can be effective if they have support regarding the implementation of laws although
they will face difficulty for long term regarding the trading business but in order to boost the
economy and for the economic development it is mandatory for the country to take effective
measures that will help in balancing the consequences of post Brexit issues and make their own
laws and regulations and be independent.

CONCLUSION
From the above analysis it can be concluded that due to Brexit there have been various
negative impacts on the UK built after this situation. The United Kingdom is recovering from the
impacts by planning to make their own independent laws and regulations and trade freely
without any restrictions which were there when the UK was in agreement with the EU. In the
beginning the UK can face issues but in order to balance the loss of the economy, the UK is
again making initiatives for the economic development of the country.

REFERENCES
Books and journals
Bisciari, P., 2019. A survey of the long-term impact of Brexit on the UK and the EU27 economies.
Brown, S.A., 2019. Brexit, the UK and Europe: Why, how and what next?. Journal of European Integration.
41(1).pp.123-129.
De Ville, F. and Siles-Brügge, G., 2019. The impact of Brexit on EU trade policy. Politics and governance. 7(3).
pp.7-18.
Erken, and et.al, 2018. Measuring the permanent costs of Brexit. National Institute Economic Review. 244. pp.R46-
R55.
Fernández,and et.al, 2020. The impact of Brexit on bank efficiency: Evidence from UK and Ireland. Finance
Research Letters. 36. p.101338.
Gamble, A., 2018. Taking back control: the political implications of Brexit. Journal of European public policy,
25(8). pp.1215-1232.
Latorre, and et.al, 2019. Brexit: Everyone loses, but Britain loses the most. Peterson Institute for International
Economics Working Paper, (19-5).
Pollard, J.S., 2021. Brexit and the wider UK economy. Geoforum. 125. pp.197-198.
Portes, J., 2022. Immigration and the UK Economy after Brexit. Oxford Review of Economic Policy.38(1). pp.82-96.
Tetlow, G. and Stojanovic, A., 2018. Understanding the economic impact of Brexit. Institute for government, pp.2-
76.
Tupa, M. and VOJTOVIČ, S., 2018. IMPACT OF BREXIT ON THE MIGRATION IN THE UK. Ad Alta: Journal
of Interdisciplinary Research, 8(2).
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