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The slow catastrophe began, and the EU is still crying again

In a June 2016 referendum, a majority of the UK population decided that the island nation should leave the EU. The then British government sought to prevent this by warning of the dire economic consequences of this decision. Brexit leads to immediate recession, painful fall in house prices and fall in exports – Reminds Bloomberg on the predictions of politicians and experts. After a long transition, the UK finally left the EU only in January 2020, followed by a breakdown on January 1, 2021.

It’s been about 100 days since then, so you can slowly get a picture of what it is Effects Independence of the island nation. Statistics show that Brexit has harmful effects, but some time has passed, which is confused with the economic consequences of corona virus infection. Leaving the EU Customs Union or the single market will have an impact only in the long run, which will give us the opportunity to reconsider once the restrictions imposed by the epidemic are lifted. At the same time, it is worth looking at what came out of the government’s “rebellion,” as described by the Brexit at the time.

In a report released before the 2016 referendum, the Treasury predicted that if the British vote, national income would fall by 3.6 per cent in two years, 520,000 people would lose their jobs and house prices would fall by 10 per cent. This was not the case as the new government, which came to power after a referendum led by Theresa May, submitted a document to the EU in March 2017, identifying the UK’s desire to leave. A two-year settlement began between the parties. Finally, in two years, by June 2018, GDP had risen by three per cent, unemployment by 280,000 and average household prices by seven per cent.

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The infection came

The epidemic came in 2020, resulting in a nearly 10 percent drop in GDP. Since closing last spring, the country has done just about anything, but the UK is far ahead of itself in comparing the world’s top seven countries (G7).

Prior to the referendum, in April 2016, the government sent a letter to all households in June urging people to stay in the EU to vote. It warned that the exit would increase the cost of living as the pound weakens and push imports higher. (Half of imports come from the EU itself.) From this estimate, the pound weakened, two years after the referendum, to 18 percent against the euro, with a further 12 percent subtraction.

Consumer price inflation rose to a one-and-a-half-year high of 3.1 per cent in November 2017 and was higher than the Bank of England’s two per cent target for the next two years. However, in the wake of the epidemic it was low.

Business tragedy

The government predicts in its letter that the economy will be less than 4.6-7.8 percent if the UK and the EU conclude a new trade agreement. The island nation would have been an EU member state in 15 years. . The Office of Budget Accounts, an organization that examines the economic rationale of the budget, estimates that Brexit has already cut 1.4 percent of GDP since the referendum. According to their predictions Long term This minus would be four percent. Bloomberg economist Dan Hanson holds 3-5 percent of government accounting for backlinks Immigration restrictions.

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The remarkable letter at the time predicted that companies would find it difficult and expensive to export to the EU. It came inside. British companies struggle with customs administration. In January, exports on the continent were 41 percent lower than in December. The government explains this figure with stock filling in December before exiting and closing due to the epidemic. Only after the restrictions are lifted will it be clear what the truth is.

A city

Prior to the vote, many predicted that the City of London’s financial center would move to the mainland, leading to major layoffs. PricewaterhouseCoopers predicts 100,000 jobs will be lost. By contrast, by March this year, 7,600 positions had migrated to the EU. However, if the EU and the British government do not agree on the adequacy of the parties’ financial systems, it may be too much, meaning that certain financial transactions involving the EU are not possible in London.

The city has already suffered huge losses. EU shares traded almost entirely in January, with a daily turnover of $ 6 billion. Giant banks such as JPMorgan Chase & Co or Goldman Sachs Group Inc. have moved hundreds of billions of euros worth of business to European financial centers.

NHS

The money saved in EU payments goes to the health system, the British Sacred Cow, the NHS. Pro-Brexit campaigners promised before the 2016 referendum that they would spend for. They said it would bring in $ 350 million a week for public health, but they had already been tapped. As agriculture withdraws EU subsidies, the UK’s net contribution is $ 250 million per week.

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The situation now is that the UK will have to transfer about $ 20 billion to the EU over the next seven years due to its previous obligations, and taxes and levies on GDP will cause more deficits than any savings, the company said. For financial research research institution experts. That way, you don’t get more health care (either). This also means that the 100-day comparison is short, and the real impact of Brexit is only really visible several years after the crown crisis.