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In a referendum on 23rd June, Britons voted to leave the EU by an overall 52 per cent majority. The UK is clearly not united in this decision – while England and Wales voted in favour of leaving the EU, Scotland and Northern Ireland voted to stay.
The EU was started after the Second World War in the hope that countries which trade together would be less likely to go war with one another.
The EU comprises 28 European countries, which co-operate economically and politically as if they are one country. This ‘single market’ allows the free movement of goods, services, money and people within the EU.
The UK joined the EU in 1973. Britain’s membership of the EU is regarded by many as fundamental to her economic growth and global competitiveness. However, many Britons have become unhappy with the imposition of EU regulations and the mass migration from poorer to richer countries within the EU.
In his last election campaign, British Prime Minister, David Cameron, promised to hold a referendum to allow voters to choose whether to stay in or to leave the EU.
The impact of Brexit
The UK is the fifth largest economy in the world and a key member of the EU. Pulling out of the EU pushes the entire world into a new era of uncertainty.
- Political uncertainty – David Cameron has resigned but will only be replaced in October.
- Uncertainty regarding the survival of the UK and the possibility of a very different Britain.
- Uncertainty regarding Britain’s ‘divorce’ from Europe – a huge undertaking which will take at least two years to complete.
Uncertainty is not good for anyone, and while it continues, financial markets will remain volatile, business and consumer confidence will be low and economic growth will be hit.
For now, it is best to ‘keep calm and carry on’- only time will tell what the outcome of Brexit will be.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)