What is “Brexit” And Issues

Now a days we are daily listening about Brexit and their possible impact for Pound and for the EU. But most of us don’t know exactly how it will effect Eurozone and specially British Pound. Today i will let you know how this problem will make things worse for British pound.

Trade and Manufacturing

Officially statistics showing that Euro Zone is the destination of almost 50% of British Goods and Exports.This trading links are bigger if we include the countries that the United Kingdom trades freely with because they have a free trade agreement with the European Union. This mean that 63% of Britain’s goods exports are linked to European Union membership.

This could be highly possible that a favourable trade agreement would be reached after Brexit as there are advantages for both sides in continuing a close commercial arrangement. But the worst-case scenario, in which Britain faces tariffs under ‘most-favoured nation’ rules, is certainly no disaster. Exporters would face some additional costs, such as complying with the European Union’s rules of origin, if they were outside the single market. However, these factors would be an inconvenience rather than a major barrier to trade. In addition, fears that exporters would be left high and dry the day after the Brexit vote are unfounded.

Foreign Investment

Concerns about a drying up of foreign direct investment if Britain votes to leave the European Union are somewhat overblown. Access to the single market is not the only reason that firms invest in Britain. Other advantages to investing here should ensure that foreign firms continue to want a foothold in the country. It is likely Britain would remain a haven for foreign direct investment flows even if it was outside of the European Union

Financial Services and the City

Financial services have more to lose immediately after a European Union exit than most other sectors of the economy. Even in the best case, in which passporting rights were preserved, the UK would still lose influence over the single market’s rules. The City would probably be hurt in the short term, but it would not spell disaster.A European Union exit would enable the United Kingdom to broker trade deals with emerging markets that could pay dividends for the financial services sector in the long run. Which is why this Brexit Came.

Public Sector

The British government could save about £10billion per year on its contributions to the European Union’s budget if the country left the Eurozone.We expect that Brexit would benefit the public finances, but not to a huge degree, Because of Suddenly Uncertainity Which would bring Unstability in Labor Market.This figure could be higher if either the British rebate was to be threatened in the years ahead or Brexit was to result in overall faster economic growth.

Overall

Although the impact of Brexit on the British economy is doubtful , we doubt that Britain’s long-term economic outlook  Depends on it. Things have changed a lot since 1973, when joining the European Economic Community was a big deal for the United Kingdom. There are  much more important issues now, such as whether productivity will recover. The shortfall in British productivity relative to its pre-crisis trend is still over 10%, so regaining that lost ground would offset even the most negative of estimates of Brexit on the economy. Based on assessing the evidence, we conclude that:

Bottom Line

There are too many things which we could share here, But Overall all of the Factors mention above are more likely to happen which is why Yesterday They were hinting about Lowing the rate which is the most important part of it. So negative interest rate instead of hiking which they were talking about half a years ago could be highly dangerous for the British economy outlook or specially for the investors.