A week has passed since more than 17 million voters in Great Britain chose to leave the European Union, leading to confusion and plummeting stock markets throughout the world. And while the immediate economic fallout from the “Brexit” decision has tapered off in that time, political leaders as well as regular people still don’t know what will happen next. In fact, British citizens aren’t even sure who will be running their country in a few months. Prime Minister David Cameron resigned last week following the vote and his assumed successor Boris Johnson mysteriously dropped out of election contention yesterday.
Profound uncertainty remains the dominant mood following Brexit, much of which is driven by the strange status of the vote itself. While not legally binding, the BBC has said “it would be seen as political suicide to go against the will of the people as expressed in a referendum.” So although this momentous decision could be reversed or rejected by Parliament, few government officials would likely be willing to challenge the choice of 17 million voters. As such, experts predict that the process of leaving the EU could take years for Great Britain to accomplish.
The economic effects of Brexit are even more unpredictable. “No one really knows what happens now,” said New York Times economics reporter Peter S. Goodman. “The collective imagination leads to dark places.” The pound decreased in value by 9 percent after the vote, causing British stocks to plummet by more than 10 percent. Matters could become even worse once Great Britain starts to formally negotiate its exit. With David Cameron out of power, some fear that the EU will develop a deliberately harsh deal in order to discourage other nations from leaving. Meanwhile, immigration will likely be more restricted in a post-Brexit Britain, a policy that the UK’s National Institute of Economic and Social Research says will harm growth even further. What’s more, Great Britain might experience its own rush to the exit: Scottish officials are already clamoring for another independence vote.
For more information on this perplexing topic, see these two explainer articles from Vox and The New York Times. With any luck the effects of the Brexit will become clearer in the coming months, even if it’s still all bad news.
Questions:
- Why would Great Britain’s economy suffer if immigration becomes more restricted?
- Should Scotland part ways with the UK?
Source: Timothy B. Lee, “Brexit: What Happens When Britain Leaves The EU.” Vox, June 25, 2016; Amanda Taub, “A Guide to Catching Up on ‘Brexit’ and Reading the Tea Leaves,” The New York Times, June 28, 2016; Peter S. Goodman, “Turbulence and Uncertainty for the Market After ‘Brexit,’” The New York Times, June 23, 2016. Photo by Chris Griffith.