Brexit impacts on Foreign Investment

Brexit Impact on Businesses

Table of Contents
INTRODUCTION..............................................................................................................................1
TASK .............................................................................................................................................. 1
1. Brexit impact on Trade..........................................................................................................1
2. Brexit impacts on Foreign Investment...................................................................................2
3. Brexit impact on Education................................................................................................... 2
CONCLUSION................................................................................................................................. 3
REFRENCES.....................................................................................................................................3

INTRODUCTION
Brexit is defined as abbreviation of British exit which refers to the UK decision. In a
referendum on 23rd June 2016 as per the majority of Britishers votes that supported in
withdrawal of United Kingdom (UK) from the European Union (EU). Therefore, Britain voted to
leave EU. The UK is generally known as one of the best country for the purpose of starting
business which could change due to major impact of Brexit on organisations (Ciuriak, D., and
Dadkhah, A. 2017). There were various effects of Brexit as British pound fell to the lowest level
and several changes occurred in the inflation rates, manufactured products, transport
equipment’s, food products, petroleum products, tobacco and alcohol and many more. This
report is based on Brixit impacts on the businesses and consider some findings or discussion by
undertaking relevant arguments. It will cover various positive and negative points as per
experts views regarding the Brexit.
TASK
1. Brexit impact on Trade
Brexit was coming from a long time as Britain has wanted to leave the European Union.
The outcome of the UK's EU referendum or votes and looming exit negotiation, there are major
effects of Brexit that effects on the trade flows between the UK and the EU. According to Lianna
Brinded, Hard Brexit will fall £ 17 billion (around $22.7-billion) from annual EU export revenues
across the key UK manufacturing sector (Xiao, J., 2017). The reason behind this is increased
prices for UK exports so EU consumers switched to the domestically produced products.
The European Free Trade Association (EFTA) was established in the year 1960 where UK
founded members. In this, if EU decide to change its various policies and procedures then it
directly impacts on the UK as they will lose its access to the single market.
As per the article on impacts of Brexit on businesses, it has been predicted that the UK
will experience a loss of at least £ 4.5 billion a year in case, they leave the EU without any
negotiation regarding new trade agreements with the European Union as well. Some
economists say that the cost would exceed the aforementioned benefits to the UK as they will
not have to pay £ 9 billion towards the European Union budget in every year. There are also
1

major impacts on the employees as well as labour in positive and negative manner. As per the
statistical data, it has been analysed that unemployment rates have increased to 6.5 % just
because of recessions that losses equivalents to 500,000 jobs.
Hence, it can be said that Brexit effected on trading and businesses in different sectors
including automotive, consumers, technology and health care etc. due to abbreviation of UK
from European Union as well.
2. Brexit impacts on Foreign Investment
AS per the statistical data, the UK's Foreign direct investment stock accounting that are
to be founded as £ 1 trillion after abbreviation from European union (Kierzenkowski, R., and
Zwart, S., 2016). There were higher trade costs as well as tariffs which directly impacted on
investment that decreased in the UK. FDI raise national productivity, best possible outcomes
and wages as well.
According to Ellen R. McGrattan, Andrea Waddle, the positive effects of Brexit is that
new empirical analysis that looking at bilateral FDI flows between 34 OECS countries including
UK over the last three decades.
EU has negative impact on FDI inflows in the UK because It has decreased by 22%. UK is
being a part of single market has various benefits as they have attracted number of foreign
investors due to having less barriers from any kind of Tariffs and UK can easily exports its
products or services at different EU countries.
3. Brexit impact on Education
There are major impacts of Brexit which affected on education sector such as positive
and negative as well. Some experts say that it can effect in positive manner due to changes in
different rules or regulation as visa rule might be complex for any EU students and various
students can find new universities for their further educations (Portes, J. and Forte, G., 2017).
They attract number of students and young talented people from around the world so that UK's
educations systems can be developed.
As per the Richard Black, UK universities has received an additional fund which is 15
percent from the European Union so they can lose this due to Brexit happening. There are
some positive impacts that can be seen in the United Kingdom because of high demands of
2

domestic and internal students for the purpose of higher education institutions in the UK.
Oxford university and Cambridge university received international applications which raised
more than 10 percent after Brexit.
CONCLUSION
From the above report, it has been concluded that Brexit has major impacts on the
businesses. The effect can be referred to as positive as well as negative. In the given study it is
defined that how Brexit affected on trade and import or export of goods and services because
many of firms are facing various problems and some economic crises. In the UK, tax rates and
duties has increased and it is difficult to survive in the tough competition. There are no more
interferences of EU so UK has separate and single market for doing businesses. It also affected
positively to the foreign direct investment as according to some experts there is a favourable
change on different FDIs. UK has face low barriers regarding tariffs so they invited number of
investors towards country. International students also are to be attracted due to changes in
rules and regulation on visa so that more talented people can be targeted.
3

REFRENCES
Books and Journals
Ciuriak, D., Dadkhah, A. and Xiao, J., 2017. Brexit Trade Impacts: Alternative Scenarios.
Kierzenkowski, R., Pain, N., Rusticelli, E. and Zwart, S., 2016. The economic consequences of
brexit.
Portes, J. and Forte, G., 2017. The economic impact of Brexit-induced reductions in migration.
Oxford Review of Economic Policy. 33(suppl_1). pp.S31-S44.
Roy, G., Lisenkova, K., McGregor. and Swales, J., 2016. Long-term Economic Implications of
Brexit.
Sarson, T., 2016. Brexit: What Would It Really Mean for Tax. Int'l Tax Rev. 27. p.16.
Wright, M., Wilson, N. and Amess, K., 2016. Brexit, private equity and management. British
Journal of Management. 27(4). pp.682-686.
Online
Brexit Impact on Education 2018. [Online]. Available Through
<https://www.telegraph.co.uk/education/0/will-brexit-impact-british-universities/>.
Brexit Impact on Businesses 2018. [Online]. Available through
<http://theconversation.com/brexits-impact-on-small-businesses-the-experts-may-be-spot-on-
after-all-90561>.
4