Brexit or “Britain Exit” is the UK’s decision to leave the European Union. It was decided based on the UK referendum where the majority (51.9%) voted to leave the EU.
Brexit has hit the news all over the world, and by now everyone has heard of it. But not many understand the importance and the implications it may cause for the British economy.
This infographic is aimed to visualise the process of Brexit and define the correlation between the Brexit events and British pound. The Brexit impact on the economy will result in changes to the UK industries, hence the infographic outlines the effects on different industries in the UK.
As Brexit progressed, it was found that the UK pound has lowered in value when compared to USD and EUR. However, it doesn’t necessarily mean that the Brexit was the only driver of this.
To define the correlation even further, extensive research was conducted into the Brexit legislation change and impacts on the industries.
As a result of the research, it was found that these industries are likely to be impacted the most, and here’s why:
The Automotive Industry
The automotive manufacturing will be affected due to the trade deals on exports from the UK. Recent news has revealed that Ford and Jaguar Landrover are both singling the closure of manufacturing in the UK, leading to a decrease in production, which can decrease the value of the British pound even more.
Tourism to the UK is likely to increase, as other currencies will be valued higher in the UK, hence travelling to the UK will become cheaper.
However, travelling from the UK will become more expensive. Hence the UK is likely to find more tourists resulting in greater spend and potentially increase in the sterling.
Due to the change in trade and imports to the UK, online businesses are likely to grow domestic sales of domestic goods, circulating the currency within the UK.
However, cheap imports from other countries may be restricted due to legislation complications. In the worse case, the EU may restrict access to the UK online businesses resulting in reduced traffic and sales.
Imports and exports will be affected the most. In the case of no-deal Brexit, UK will be put on provisional tariffs, resulting in ridiculously high prices on imported goods and services to the UK. As well as, exporting goods will become more expensive.
The Housing market is likely to remain the same but is more likely to attract foreign buyers to purchase properties in the UK, slowly increasing the value of the UK real estate.
On the other hand, domestic buyers are likely to avoid the purchase due to the weakening of the pound. A weak pound will result in a lower value for money, restricting UK buyers.
The GBP is tied with interest rates and inflations and GDP. All of these might be affected by the lower price of the sterling. As a result, Brits will have less of the disposable income, resulting in lower spend, higher prices hence decrease in forex investments.
Brexit is likely to affect the value of the British pound even further. And everyone will be affected in one way or another. However, it is impossible to predict until it actually happens.