Brexit's Influence: Assessing UK Economic Growth and Employment Trends

This report provides a comprehensive analysis of the economic impact of Brexit on the United Kingdom. It examines key economic indicators such as GDP and employment rates, providing statistical data and graphical representations to illustrate trends. The report reviews the changes in trade relations and foreign investment, considering the fluctuations in exchange rates and the overall economic performance of the UK post-Brexit. The analysis includes a review of literature discussing the contentious consensus on trade, market shocks, and the UK's position in the global economy. The report concludes by assessing the overall impact of Brexit on the UK's economic growth, employment levels, and trade dynamics, providing a detailed overview of the observed changes and their potential implications. The report uses data from various sources to support its findings and adheres to the guidelines provided, including the required structure, word count, and referencing style.

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Britain’s growth in the uncertain Brexit
circumstances

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Abstract
The report has covered all the aspects in relation to the Brexit and its impact on the UK. There is
the analysis which is performed and in that the change which is noted in the GDP and
employment is also considered. The explanation showed that the UK has attained the growth at
higher level than other companies and unemployment in the country has declined. The
fluctuations have been noted in the exchange rate which was prevailing over years and the same
has been represented with the help of the graph. The final outcome of the report shows that
Brexit turned out to be positive for the UK economy.

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Table of Contents
Abstract............................................................................................................................................2
Introduction......................................................................................................................................4
Literature review..............................................................................................................................4
Trade’s contentious consensus....................................................................................................4
Market shock...............................................................................................................................5
Analysis...........................................................................................................................................6
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
In this report, the Brexit will be taken into account and with that its impact on the UK will be
assessed. The changes which took place in the economy will be covered and in that economic as
well as other aspects will be involved. The impact which is faced by GDP will be analysed by
collecting appropriate information. The trade relations have been greatly impacted and that will
be analysed with the consideration of the facts and figures. The changes which have been made
to deal with the condition will be taken into account and then the benefits which are attained by
the UK in terms of trade will be identified.
Literature review
Trade’s contentious consensus
Brexit is the state which took place under which Britain exits from the European Union. After
this, there were various impacts which have been faced in terms of trade. The rules which were
earlier applied are now not used and in their place the rules which are framed by world trade
organization are taken into consideration (Di Cataldo, 2017). Much of the change has not been
noticed in the rules and they were applicable in effective manner. The growth in the regulatory
divergence has been noted and that affected the trade cost which increased and with that, the
volume and supply chains were also affected. The influence which was earlier available on the
EU regulations is lost by the UK and the freedom which was expected is also not much that they
can regulate in an independent manner. There will be a cost which will be incurred and tariffs
will also be imposed (Oehler, Horn and Wendt, 2017). These will be of the permanent nature and
this will be due to the use of the rules which have been provided by WTO (Bartels, 2016). None
of the countries is affected by the imposition of the tariffs and there was no benefit which was
received by either EU or UK. There were assumptions that the UK will be operating in a free
manner but this was not immediately after the Brexit. In response to Brexit, the other states of
the EU have started wishing for the tariff-free trade (Davies and Studnicka, 2018). There were
various companies who were in favor and were interested to have a fair deal. Most of the deals
were made outside the European Union and there was a position of the fair deal in all of them.

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Market shock
Foreign investments also faced the effect of Brexit and the UK is one of the largest recipients in
terms of foreign direct investments in the European Union (Dhingra et al., 2016). There will be a
reduction in the investments which are made from various places and by that overall decline in
the investments will be faced. In the UK around 46% of the FDI was from EU and this has
declined to some extent in the past as the same in 2009 was 53% (Ernst and young, 2018). There
are various factors which remained unaffected by the Brexit and UK has attained benefits due to
the same. They involve deep capital markets, light regulations, and languages. There is the risk
which is created for the other countries by the UK leaving EU.
The UK is considered to be the lost liberal state and will be opposing the illiberal proposals. UK
is playing a significant role in policy debates which are taking place in the EU. The industry in
the UK is benefitting from all the research collaborations which are taking place in Europe and
flexibility is also gained over other policies which are applicable outside the EU (Ziv et al.,
2018). There will be more funds which will be received by the UK from the research council and
that will be more than other countries. Different approaches are used by the UK for the
procurement and in that government, discretion is used in a free manner. The culture and style
are also affected by the UK and in that various bodies are involved.
The trade policies will be set by the UK on their own and they will be free in this respect. There
will be less leverage for the UK and will be a trading partner at a lower priority for major
economies. It will be gaining flexibility in all the negotiations in relation to the trade deals and
less affected by the agricultural protectionism. Leverage is gained by the UK in the addressing of
FTAs and irritants (Lawless and Morgenroth, 2019). It is important as by resolving the
regulatory obstacles the access to the market will be gained. On the intellectual property, there is
the benefit which is gained by the UK and this is through negotiating weights in case of the
concluding bilateral deals.
UK plays and important role in maintaining the GDP of the EU and is the strongest advocate by
which TTIP will be launched. There is an investment agreement which will be made with china
and that will lead to the full FTA negotiation (PWC, 2018). There are various benefits which will
be received by the UK with the Brexit and it will be benefitting the complete economy (The
balance, 2019). The investments will be made in the UK by various corporates and by that

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requirement of the labor and jobs and will be increased. This will be making the condition for the
job seekers better and they will be able to gain the jobs. The impact of the Brexit is not much and
it will not be affecting the rate at which employment is made. There is the growth in the rate of
employment which is noted in the years of Brexit (BBC, 2019). There is no decline which will
be made in the employment post Brexit and that is an advantage for the complete economy of the
UK. This will be adding to the value of the country and it will be benefitting in all the aspects
which are involved.
In Britain, there are various small trading companies which have performed well in the small-cap
equity index. There is a rise of around 20% which has been noted after the Brexit. In February’s
volmageddon there was a global sell-off which took place and by that performance has been
declined (Tetlow and Stojanovic, 2018). It was assumed that the multinational and large firms
will be suffering from Brexit but they also experienced a hike of around 26% and this was the
case with the venture capital and private equity sector. The foreign investors have been attracted
by private equity in the UK with the help of their global capital allocators (Giles, 2018). They
continued to make investments in British companies. There was an increase in the investment in
the UK by companies like Amazon and goggle and workers will be hired in the jobs which
require high skills. With the help of American investment, there will be better management and
technology which will be available and that will be increasing productivity with around 10%.
Analysis
The investments in the UK have raised and by that there are various factors which have been
affected such as the labor market and employment rate (Ford, 2016). The labor conditions were
not affected by the Brexit and so the rates of unemployment have declined and reached to its
lowest levels.
Year employment
rate
2009 70.90%
2010 70.40%
2011 70.30%
2012 71.00%
2013 71.50%
2014 72.90%

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2015 73.70%
2016 74.40%
2017 75.00%
2018 75.60%
Mean 0.7257
Median 72.20%
Maximum
value
75.60%
Minimum
value
70.30%
Skewness 0.313292
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
67.00%
68.00%
69.00%
70.00%
71.00%
72.00%
73.00%
74.00%
75.00%
76.00%
77.00%
employment rate
employment rate
Figure 1 UK employment
After the Brexit, there was high uncertainty which was involved but the same has not affected
the employment in the UK. It has been assumed that the economic growth will be slowed down
but the state did not arise. There was the same growth which was notices in the labor market and
the rate of employment continued to grow similarly. It can be noted from the graph that is
presented above. The working-age people have hit the new targets of 76.1% which was a
commendable increase in the employment sector (Statista, 2019). There is strong growth in
employment and it will be beneficial for those in search of jobs.
Year GDP (In
trillion

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GBP)
2009 1.53
2010 1.58
2011 1.64
2012 1.69
2013 1.76
2014 1.84
2015 1.89
2016 1.96
2017 2.04
2018 2.11
Mean 1.804
Median 1.8
Maximum
value
2.11
Minimum
value
1.53
Skewness 0.154093
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0
0.5
1
1.5
2
2.5
GDP (In trillion GBP)
GDP (In trillion GBP)
The GDP which has prevailed in the past years before and after the Brexit have been taken into
consideration. On the basis of that, there is the determination of the mean, median\ and other
measures of data analysis (Statista, 2019). It is identified that there is continuous growth which is
made in GDP and it can be seen with the help of graph presented above. There is the mean of

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1.804 which is identified and median is at 1.8. The Skewness which is calculated is positive and
this shows that positive Skewness is involved and the movement will be on right side. This is a
positive position and there will be growth which will be prevailing. The maximum GDP which is
identified in the given period is 2.11 trillion pounds and the minimum level at which GDP
declined is at 1.53 trillion pounds (Jessop, 2018). It can be noted that the GDP of UK in all the
years is fluctuating between these two values only. The growth is taking place and this ensures
that with the undertaking of Brexit there is a positive change which is made for UK.
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
97
98
99
100
101
102
103
104
105
UK
Germany
France
Italy
It can be noted from the graph that the growth in the UK has been far better than the other
European economies. There is a growth of around 0.4% which is noted in the latest period. All
the other economies are not able to attain the growth in the GDP in the manner it is being
attained by the UK. There is continuous growth which is being observed and it will be beneficial
in the long run (Wadsworth et al., 2016). All the other economies are also shown in the graph by
which the comparison among all can be carried in an effective manner. When all the other
countries will be facing the downfall due to the Brexit there is no adverse impact which is faced
by the UK. Rather there is the growth in the economy which has been made and this shows that
earlier assumptions of declining growth were incorrect and not possible in a practical world.

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1/2/2009
9/11/2009
5/21/2010
1/28/2011
10/7/2011
6/15/2012
2/22/2013
11/1/2013
7/11/2014
3/20/2015
11/27/2015
8/5/2016
4/14/2017
12/22/2017
8/31/2018
0
0.2
0.4
0.6
0.8
1
1.2
Euro Pound exchange rate
Euro Pound exchange rate
Figure 2 Euro British Pound Exchange Rate
There is the growth which is noted in all the aspects after leaving of the European Union and by
the growth is projected for the coming period also. There is the growth of around 3% which is
being projected for the future and it will be further increased (Martin, 2017). The exchange rate
has also increased and this can be noted by the time series chart which is presented above (Macro
trends, 2019). All of these factors show that the growth which is made in the UK is better in
comparison to the other European Union nations (Portes and Forte, 2017). There are huge
fluctuations which are experienced but then also the benefit will be received by the economy.
The performance in terms of the currency has also been evaluated and it is identified that the
value of the pound has increased over time and the movement of the pound against Euro is
represented in the chart above (Macro trends, 2019). The downfall has been noted for one
immediately when the Brexit took place and due to that, the projections were not able to be made
by anyone. The future value and the exchange rates which have been presented are with the help
of the available data. The sterling is determined to be at the highest in comparison to the Euro
(Gudgin et al., 2018). A slight decline has also been noted in this in the later periods. The overall
position was better for the currency and also the economy has met with a high level of growth.

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From this, it can be said that the growth in the UK is far better than the other nations involved in
Europe.
Conclusion
The condition after the Brexit was uncertain and in that various changes took place. The impact
of the same on the UK has been considered in the report above. There is a high level of
uncertainty which is involved and in that it was assumed that the conditions will be adverse and
its impact will have to be faced by the UK. The analysation of the complete scenario is made and
it is determined that out of all the economies the UK is the one which has experienced the
highest growth. The free trade was possible and policies which were formulated by WTO were
used. It has been determined that employment opportunities have developed and that is helping
in reducing the unemployment rate. There is growth in the GDP which is made and that is adding
to the value of the economy. The benefits for the UK are more than other nations and is
maintaining its position in the post Brexit period.

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References
Bartels, L. (2016) The UK's status in the WTO after Brexit. [Online] Available at:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2841747 [Assessed 23 August 2019]
BBC. (2019) Economic effects of Brexit. [Online] Available at:
https://www.bbc.com/news/topics/cv0kerlpjwvt/economic-effects-of-brexit [Assessed 16 August
2019]
Davies, R.B. and Studnicka, Z. (2018) The heterogeneous impact of Brexit: Early indications
from the FTSE. European Economic Review, 110, pp.1-17.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J. (2016) The impact of Brexit on
foreign investment in the UK. BREXIT 2016, 24, p.2.
Di Cataldo, M. (2017) The impact of EU Objective 1 funds on regional development: Evidence
from the UK and the prospect of Brexit. Journal of Regional Science, 57(5), pp.814-839.
Ernst and young. (2018) Signs of a Brexit impact on UK foreign direct investment. [Online]
Available at: https://www.ey.com/uk/en/newsroom/news-releases/18-03-29-signs-of-a-brexit-
impact-on-uk-foreign-direct-investment [Assessed 23 August 2019]
Ford, M. (2016) The Impact of Brexit on UK Labour Law. International Journal of Comparative
Labour Law and Industrial Relations, 32(4), pp.473-495.
Giles, C. (2018) The UK economy since the Brexit vote — in 6 charts. [Online] Available at:
https://www.ft.com/content/cf51e840-7147-11e7-93ff-99f383b09ff9 [Assessed 16 August 2019]
Gudgin, G., Coutts, K., Gibson, N. and Buchanan, J. (2018) The macro-economic impact of
Brexit: using the CBR macro-economic model of the UK economy (UKMOD). Journal of Self-
Governance and Management Economics, 6(2), pp.7-49.
Jessop, J. (2018) “A no-deal Brexit could knock 10% off UK GDP”. [Online] Available at:
https://iea.org.uk/publications/a-no-deal-brexit-could-knock-10-off-uk-gdp/ [Assessed 16 August
2019]