The costs of Brexit for UK economy
Leaving the EU without a deal in place for future trading agreements would be the worstcase scenario for British economy. In the long-run Brexit is expected to reduce UK living standards due to the declines in trade and foreign direct investments. The British economy will suffer from the losses impl...
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2017-06-01
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| Series: | Theoretical and Applied Economics |
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| Online Access: |
http://store.ectap.ro/articole/1288.pdf
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| Summary: | Leaving the EU without a deal in place for future trading agreements would be the worstcase
scenario for British economy. In the long-run Brexit is expected to reduce UK living standards
due to the declines in trade and foreign direct investments. The British economy will suffer from the
losses implied in the export sectors due to the fact that 45% of its exports are destined to EU
members. The potential loss of importance for the City of London will generate a fragmented
European financial market that will reduce systemic risk. On the other hand, market participants
could face a dual regulation on financial markets, increased uncertainties and frictional costs. The
plan to design a Capital Market Union will create a strong competition for London, while Frankfurt
and Paris are eager to absorb the financial services lost by British economy. |
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| ISSN: | 1841-8678 1844-0029 |