When it comes to the brexit, “uncertainty” is the name of the game. There has been a steady stream of articles since the referendum that are attempting to predict what’s going to happen. That’s the problem though, no matter the predictions, nobody really knows what’s going to come next. So, rather than make informed guesses on what happens next, we feel it’s better to simply identify the question marks.
Impact on Employment and Labour
This is a big one, in fact, maybe the biggest. The UK government and the EU are currently in negotiations to determine the labour rules and regulations that will be enacted once the brexit is finalized. Currently, there are 2.1 million European immigrants working in the UK. These workers are in industries like IT, construction, engineering, and healthcare, as well as in the unskilled labour market. If they leave the UK, either because they are required to or because they choose to, there will be a large gap between the demand for labour and the supply. UK’s ability to recruit international talent may be impacted, which would cause a knock-on effect to many businesses.
Losing access to a single market
UK businesses that offer their products and services to the whole of the European Union may have this ability hindered, post-Brexit. The European Free Trade Associated was formed in 1960, with the UK as a founding member. But now the UK needs to negotiate free trade agreements with other countries and entities, including the EU, and it remains to be seen what those agreements will look like. If the EU decides it’s going to change policies after brexit, it might mean that the UK will lose its access to the single market.
Possible reduction of foreign investment
About half of investment in UK businesses comes from the rest of the European Union. It’s possible that tariffs and higher trade costs will decrease investments in the UK. The “uncertainty” of what a post-brexit business environment will look like in the UK has already seemed to put a damper on investments.
A knock-on effect of the further regulations involved in a post-brexit world includes company headquarters. Major corporations like Vodafone and Visa have discussed the possibility of moving their headquarters out of the UK to somewhere else on the European continent. The movement of major multi-national corporations from UK to elsewhere has a variety of implications, not least of which include the lost jobs.
It remains to be seen the true and final impact that Brexit will have in the UK. Things remain uncertain, as they have been since the referendum, and will remain so until agreements have been negotiated between the UK and EU. One thing is certain, though, change is coming!