How Did Brexit Affect the Worldwide Markets?*
*This article is NOT an endorsement of any political candidate or viewpoint. The information is being presented from the original source(s) so that readers may draw their own conclusions.
The unpredictable and historic vote for Britain to leave the European Union (EU) will likely remain as the most influential event of 2016, taking a narrow second place to the upcoming presidential election in the United States of America. Every single mainstream poll showed that staying in the EU was virtually guaranteed. To add insult to injury, there was a great deal of hostility aimed at supporters of leaving the EU. They were bombarded with insults and fear-inducing stories of Britain’s economy collapsing should the vote to leave the EU succeed.
It has been nearly two months since the vote has taken place. How have the worldwide markets been affected since that time?
The answer will change depending on who you ask. Most experts agree that it is too early to draw any kind of definitive conclusion. With that being said, the seemingly large effect that Brexit would have on the worldwide markets appears to have been greatly overstated. Economic growth forecasts predict that the overall world economy went from 3.2% to 3.1%, while Britain’s economy went from 1.9% to 1.7%. It’s a negative result but nowhere near what was initially predicted. Many worldwide markets are eagerly waiting to see how things will unfold a year from now. The fact that the pound is now at its lowest value in 31 years is another telling sign of things to come.
American companies are also concerned about the usage of their services in Britain. They predict that there will be a steady decline following the Brexit vote. Currently, these companies are taking preemptive action to avoid losing hundreds of millions of dollars in profit.
Although Britain has voted to leave the EU, it will take two more years to finalize the details. Already, we can see that the worldwide markets aren’t taking their chances and refuse to wait until the very end to see how this unfolds. They are getting themselves ready in the event that Britain’s economy takes a toll for the worse. Trade seems to be the main concern as Britain will have to renegotiate its trade rules with its allies and neighbors from scratch. These negotiations can take several years to finish and may discourage other countries from trading with Britain.
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