Brexit and Its Impact on Regional Economic Development

The report discusses the impact of Brexit on the regional economic development of the UK. It covers the macroeconomic impacts, short term impacts, job losses, public finances and economic impacts due to migration. The report highlights the negative effects of Brexit on the UK economy and warns about the lasting effects.

Background
The studies of Brexit have revealed the overall impact of leaving the EU, its implications on
jobs and the impacts on the public finances. International organizations such as the IMF and
OECD have also contributed to the report. Some of the evidences states clearly about the and
losses from Brexit. The following report will state the several effects of Brexit and the
reasons behind it. The findings below state the likely effects of the Brexit on the regional
economic development.
Macroeconomic impacts of Brexit
 Different kinds of ways have been proposed for modelling the consequences related to
the macroeconomy of Brexit and from all of them it was found out that there will be
presence of a huge loss of gross domestic product of the economy of the United
Kingdom.
In case when the United Kingdom will be maintaining the rate of growth up to the
year 2030, then the economy of the United Kingdom would be around thirty percent
larger in size. However, if there results a loss of six percent, then it would mean that
there will be only twenty four percent growth instead of thirty percent which would
also suggest that the economy of the United Kingdom would become smaller.
1. One of the significant reasons behind the presence of huge difference is the
assumptions which is about the shifting from the latest access where the United
Kingdom faces various restrictions.
2. Along with the presence of assumptions there are also disagreements related to the
techniques which will be analytical in nature.

3. The scenarios which causes minimum damage to the interest of the United Kingdom
were those which comprises of the fewest restrictions on the access of United
Kingdom.
The short term macroeconomic impacts of Brexit
 There had been an agreement, that there will be a presence of a very short term
negative shock to the economy of Europe due to Brexit
Although, there had been presence of consent that for how many days the impact will stay
and also whether there will be only presence of limited cost or any kind of permanent effects.
There is presence of two main reasons behind this short term effect:
1. Presence of uncertainty which surrounds the outcome of the vote have also deterred
the investment.
2. Presence of transitional cost due to shifting towards a new regime in case of
investment and trade.
3. Another short term effect can be derived from the volatility of the currency and the
reactions of the financial markets. According the implications of The Bank of
England there can be a result of financial instability due to Brexit which can also have
a damaging macroeconomic effect as a result of financial openness of the United
Kingdom. ]
Jobs

Lower level of the gross domestic product also means high level of unemployment in the
economy of the United Kingdom in terms of macroeconomic level. there was a presence of
3.3 million jobs as there was presence of 12% of demand for UK services and goods.
However, some campaigners suggested that jobs will not always be at risk from Brexit.
Although some of the sectors are likely to get affected by unemployment and also there could
be increase in jobs. Some of the job loses can also take place in London. There is also some
of the import competing industries which can help in increasing employment.
The economy of the United Kingdom has become increasingly dependent on the service
sector as the main engine of the job creation and also acts as a source of demand export. The
proportion of the services in United Kingdom increased from 28% to 41% where the key
service activities grew rapidly which includes business as well as financial services which
will be significant to the overall export for manufacturing sectors of cars, computers and
pharmaceuticals. The distribution of jobs usually also gets influenced with the shift in the
destination of the FDI in to the United Kingdom.
The public finances:
One of the impacts of Brexit that will be on the public finances will be that it will allow the
people of United Kingdom to save on the current payments in to the budget of Europe. Any
kind of savings from the contributions of the EU Budget will not be present when Brexit will
lead to the loss of gross domestic product and the public finances would be loss when the loss
was greater in spite of no longer being paying into European union. Based on the data of
2014, it can be said that the saving will be around £280 million per week since ‘sends to
Brussels’ is that amount which will get deducted. Some of the people including farmers and
various people from the universities will lose from Brexit. Some parts of the UK which will

benefit from the regional policy of the European Union will be also losing fiscally. The most
affected will definitely be the West Wales.
Economic impacts due to migration:
Migration from the European Union will have both the negative and the positive effects in the
economy. The inflow of workers from the Europe will not always will have a high effect on
the labour supply and therefore a large number of public services will be depending on the
workers of the European Union. The citizens of Europe who are of the working age will be in
employment than those people who comes from different places and will also make a
contribution the public finances of the UK.
Who will win?
There might be presence of some kind of opportunities present for the UK in order to cut
costly regulations but the regulations also have some benefits for consumers as well as for
business. International organizations such as IMF and OECD have been already warning that
the balance of risks of the economy of UK is negative and will also be having lasting effects.
However, data which are related to the macroeconomy of the nation can be difficult to relate
the individual circumstances