Analyzing the Economic Impact of Brexit on the United Kingdom

This report examines the multifaceted impact of Brexit on the UK economy. It begins by defining Brexit and its context within the European Union, highlighting the UK's vote to leave and the subsequent economic and trade implications. The main body of the report explores both the potential positive and negative effects of Brexit, including the creation of a competitive economy, cost savings, and the ability to implement independent policies. It also addresses potential drawbacks such as increased trade costs, decreased foreign direct investment, and the potential for economic stagnation. The report incorporates data from various sources, including surveys and analyses from experts, to provide a balanced assessment of the potential consequences. The conclusion summarizes the findings, acknowledging the uncertainty surrounding the economic impact of Brexit and its potential to reshape the UK's economic landscape. The report also includes a table illustrating the opinions of people regarding the effects of Brexit on the British economy.

REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Brexit is the short way of denoting exit of United Kingdom from European Union. The
term is the result of merging of the words Britain and exit. England, Wales voted to leave EU
while Ireland and Scotland voted backed their votes and insisted in staying in EU. European
Union is the partnership in terms of social and economic aspect amongst 28 European countries.
United Kingdom is set to leave the EU on 29th March 2019. The present report will cover the
effects of Brexit on the trade and economy of the United Kingdom. There were many discussions
held in the UK where the impact Brexit would have upon the business environment of the
country. The report will also highlight how economic growth of the UK would react post the
Brexit event.
MAIN BODY
European Union is basically an association in which 28 European countries are partners.
The association was formed for the purpose of fostering good trade and economic relations
between these countries. On 23rd June 2016, in a referendum UK voted in the favour of Brexit.
Soon after the declaration by UK of its plan of leaving EU, questions started arising in context of
its impact on the economic relations with countries in the continent.
The impact of Brexit on the UK economy is two faced i.e., it has both positive and
negative effects on the economic condition of the United Kingdom. The positive impact on the
economy would be that leaving EU would help it in creating a competitive economy by which
employment and high wages would be generated. Belonging to a particular association for
developing a single market to exploit does not help countries to achieve economic success in
terms high economic rate, employment rate, rise in living standards of people etc (Busch and
Matthes, 2016).
Another advantage UK would have posted the Brexit is the saving of cost in terms of
membership fees. This is because the country would be part of EU's budgets. In the year 2016,
country paid £13.1 billion to the Union in against of which it received £4.5 billion for spending.
This extra contribution made by the country would now be saved after leaving the union. Such
big amount could be used by United Kingdom in its internal affairs such as developing public
utilities, infrastructure etc (Kee and Nicita, 2017).
The growth of EU is stagnant and leaving the union would mean relieving itself from
constant economic condition. Also, the regulation of association would be unveiled from the
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country through which it could implement those policies and regulations that will create a
competitive edge for it (Allan and Comerford, 2017).
The soft side of Brexit is that lawmakers are pressuring for more time to negotiate a
consensus without time running out before March 29th, effectively blocking a no-deal. This
amendment, tabled by the former cabinet minister and Labour Party politician Yvette Cooper, is
gathering wide cross-party support and has a good chance of success (Brexit has reached its
inevitable crunch time, 2018).
However, some people are suggesting that Brexit will hurt the UK's economy. This is
because being a member of union, countries enjoys the various privileges such as free trade
across the borders. It will result into an increase in the overseas trade costs in the form of new
tariffs for firms exporting their goods. Leaving the union will create the problems in trade and
business for the organisation in the country. The country will suffer the loss of trade with its
surrounding countries and also the negotiating power of country at the international trade forum
will be decreased. It will also discourage the foreign direct investment because of country would
no longer enjoy the facility of free trade, low tariffs with other countries (Dhingra and et.al.,
2016). This would discourage the investors in opening up their ventures into the state. This will
create a burden on UK's economy and the pace of economic growth would become slow. Some
analyst even said that Brexit event might make the growth of country stagnant (The
consequences of a British exit from the European Union, 2017).
A survey was conducted where people 30% people said that leaving the union will have
positive impact on the United Kingdom as they believe economy will become independent which
would help the country in creating heal;thy competitive environment while 44 % felt that this
move by the government would make the economy of country weaker in the year 2018 as they
felt that free trade policies will be dis-melted between Europeans nations (Do you think Brexit
will have a positive or negative impact on the British economy, 2018.). Below is the table that
shows opinions of people regarding the effects of Brexit on the British economy.
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CONCLUSION
From the above project report, it can be summarised that the decision of government of
UK of leaving the European Union could go either way. It can make the country more self-
reliant and independent in its trade decisions. This would help it in developing a healthy
competitive environment in the country. However, was also concluded in the report it that Brexit
will impact economy in the sense that various privileges and grants provided by association
would no longer be available to UK such as spending grants, free trade between European
countries. It will also increase the trade cost for the companies that are engaged in international
business.
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Illustration 1: Positive and Negative Impact of Brexit on UK economy
(Source: Positive and Negative Impact of Brexit on UK economy, 2018 )

REFERENCES
Books and Journals
Allan, G. and Comerford, D., 2017. How might Brexit impact the UK energy industry.
Busch, B. and Matthes, J., 2016. Brexit-the economic impact: A meta-analysis.(No. 10/2016).
IW-Report.
Dhingra, S and et.al., 2016. The impact of Brexit on foreign investment in the UK. BREXIT
2016. 24.
Kee, H. L. and Nicita, A., 2017. Short-term impact of Brexit on the United Kingdom's export of
goods. The World Bank.
Online
Do you think Brexit will have a positive or negative impact on the British economy. 2018.
[Online]. Available through <https://whatukthinks.org/eu/questions/do-you-think-brexit-
will-have-a-positive-or-negative-impact/>
The consequences of a British exit from the European Union. 2017. [Online]. Available through
<https://europeanmovement.eu/wp-content/uploads/2016/05/EMI_16_PolicyPosition_Brex
it_17_VIEW_FINAL.pdf>
Brexit has reached its inevitable crunch time. 2018. [Online]. Available through:
<https://edition.cnn.com/2019/01/28/opinions/theresa-may-brexit-trail-gbr-intl/index.html>.
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