Thursday, November 9, 2017

Impact of Brexit in UK

Brexit
Brexit is the United Kingdom leave the European Union with the referendum on 23 June 2016, 51.9% of the participating voted to leave the EU. On 29 March 2017, the British government invoked Article 50 of the Treaty on the European Union. The UK is leaving the EU on 29 March 2019.

1.      The impact on economy of UK
The bank of England will raise the interest rates in order to curb inflation. The pound's sharp drop 9.5%, it may make the import to the UK more expensive. The squeeze on living standards was become worse due to the increased cost of importing fuel, clothes and food, the inflation is rising up to 2.9% from 2.6%. Now the currency exchange rate for pound to RM is 1: 5.52.

2.       Trade and manufacturing
Before the Brexit, UK is the biggest trading link in EU and trade freely because UK has a free trade agreement with EU. This agreement state that UK is 63% of Britain's goods exports are linked to EU membership. But now after Brexit, the exporter of UK will face some additional cost, such as complying with EU's rules of origin

3.      Crisis to investor

As British is under a risky and unstable economy stage after exit the EU , all the share and investment would also be affected as it is not looking promising at this point . Thus, most of the share or investment holder in British may incurred huge losses while minority of them might view brexit as an opportunity and received gain.

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