Wednesday, March 29, 2017

What Brexit will cost Britain: More debt, weaker growth and a final bill

Its officially official as the Prime Minister of the United Kingdom sent a letter to the EU confirming their leave from the EU, with two years to fully remove themselves.  Britain's exit from the EU obviously has major ramifications throughout Europe.   Economists project a major uphill climb for the UK as their leave from the EU as it will be a costly exit and will impact their economy for many years.  The Office of Budget responsibility projects slower economic growth post-Brexit compared to pre-Brexit, 2% and 2.2%, respectively. OBR also projects higher debt as the UK government will have borrow more as less taxes will be paid.  Brexit is likely to hit the the job market as companies, mostly banks, have already relocated jobs to protect their European operations. Unemployment is projected to increase from 2018-2020, and peak at 5.2% (currently at 4.7%).  What will the next two years look like for Britain and Europe?  How can British Parliament combat the challenges mentioned above to create a sustainable economic future? Also, just my curiosity, will London stay as the main financial center for euro trading even after the exit?

1 comment:

  1. The more facinating part of the Brexit for me is how it exists within the general right-wing reactionary response that we are seeing in the West. We have far right nationalist/populist parties springing up like weeds. Forget a recession in Britain; what about the rest of the EU? What happens when France gets antsy under a Le Pen government? If (when) Merkel gets unseated in Germany, what is it going to do to Western economies when the flow of goods and services in Europe begins to snarl? Economic crisis are fertile soil for growing extremist movements. I made a lot of noise about this before, and from my chair the Brexit is gasoline for these nationalist parties and their dangerous rhetoric.