Impact of UK Brexit from EU on Economy

CASE STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
UK and European Union.............................................................................................................3
Changes adverse which will be impacted on UK........................................................................3
Benefits of Brexit (Favourable changes).....................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The report is on UK exit from European Union and its impact on the country’s economy. It
discusses the positive and negative aspects of UK exit from EU. Thus, the report provides a
critical analysis of Brexit.
UK and European Union
UK had became member of EU in 1973, the economic and policy union in Europe. In the 1950s,
the European Coal and Steel Community was established in 1952, followed by the European
Atomic Energy Community and the European Economic Community in 1957. The European
Economic Community was known to be ‘Common Market’.
Britain remained a member of EU for 47 years and becomes the first member to opt out from
European Union. There was a voting of UK residents which changed ways with EU on June
23,2016 when UK voted to leave the organisation (Tetlow and Stojanovic, 2018). The residents
determined that the benefits of free trade were insufficient to counterbalance the disadvantages
of free movement immigration. Vote in favour of UK exit was 17.4 million compared to 16.1
million who voted for remaining. UK finally exited from European Union on 31 Jan 2020 in
which the transition phase continued till December 2020.
Changes adverse which will be impacted on UK
Trade
As the UK is no longer a member of the customs union, its trade and access to the EU's single
market would be harmed. It now has a trade agreement that allows for zero tariffs and zero
quotas on goods traded with appropriate origin criteria. With Brexit, free movement between the
EU and the UK came to an end. Europeans who have settled in the United Kingdom must ensure
that they have the required documentation from the British government granting them permission
to stay in the nation (Bloom and et.al., 2019).
Passengers travelling between the EU and the UK should have their passports ready to exhibit at
the border. Business travellers with special needs who conduct business in the EU on a regular
basis may need to establish a local subsidiary. Many services, such as telecommunications,

electronic services, and broadcasting, may be subjected to taxation. To meet its financial
obligations as a member of the EU, the UK must pay a bill of 25 billion pounds until 2057.
In terms of security, EU legislation does not apply to the UK; however, the UK will have to work
with the EU on aspects of law enforcement and criminal justice.
The impact which UK is currently facing of Brexit is that economy has slowed and the
businesses are moving the headquarters to European Union. This is also having an impact on the
employment in the country and there are consequences which are also being seen in Ireland,
London and Scotland.
Growth
The biggest demerit being faced by UK is the damage to economic growth to UK. It has been
mainly due to uncertainty which is around and depends on the final result. The uncertainty in
Britain became slow from 2.4% in 2015 to 1% in 2019. The government in country made an
estimation that Brexit would lower the growth of UK by 6.7% over the next 15 years. The
assumption is made of free trade’s current terms but immigration has been restricted (Tetlow and
Stojanovic, 2018).
The British currency fell due to the referendum which helped exports as their prices decreased
but imports prices increased. The currency could not regain pre-Brexit high.
Jobs
Brexit has harmed the UK's young workforce. Until 2030, Germany is expected to have a labour
deficit of 3 million skilled workers. UK workers have suffered as a result of the lack of job
opportunities following Brexit. Employers are having a difficult time hiring qualified candidates.
The main explanation is that the number of EU-born workers who left the UK dropped by 95%
in 2017. It has primarily impacted low- and medium-skilled employment.
Trade
UK will be able to negotiate new trade deals with countries outside of the EU, which now has
over 40 accords and 70 countries.