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Posted by: dezrezsysadmin - Friday, November 4th, 2016
It is extremely hard to predict what the long-term impact of the Brexit vote will be. This is particularly the case because the result was so close, with the ‘leave’ vote winning by 51.9% to ‘remain’s’ 48.1%. This means that popular support for Brexit is somewhat limited. Also, the political landscape was changed immensely in the immediate aftermath of the referendum.
David Cameron’s resignation as Prime Minister, brought about a big change in the government under Theresa May. However, it is too early to say how successful she will be as Prime Minister, and only time will tell how well she will cope with the pressures of overseeing the withdrawal from the EU.
The major question which now arises is when the notice to trigger article 50 will be received. There has been some stipulation that some EU leaders are adamant to complete the negotiations before the EU parliamentary elections take place in the summer of 2019 and before the appointment of a new European commission. This would mean that Article 50 would need to be triggered following the French presidential election in early May 2017.
Latest statements made by Theresa May have suggested that formal Brexit talks with the EU leaders could take place before the end of March 2017, however many have blasted this idea. Many have appealed this decision by stating that the Prime Minister may lose a quarter of her negotiation timetable due to Germany refusing to talk until their elections have taken place next summer.
In practical terms, it appears that the Brexit vote did have an immediate impact on the British economy and the UK housing market, but this doesn’t appear to have been anywhere near as serious as was previously predicted. House sales in London and the West Midlands still seem to be falling compared to other parts of the country, but there is a prediction that house prices will rise within the coming months as the demand for housing continues to outweigh supply.
It is thought that international investment will eventually rebound, but the extent of this is highly dependent on the international negotiations which will take place in the coming months and years. Worries that a ‘leave’ vote would cause another crash in the housing market also seem to have been refuted. Figures from the UK’s largest lender Halifax show that in the three months following the Brexit vote, house prices dropped by 0.5% to take the average UK property price to £214,140, which is down by around £1,000 from June. In context, the financial crisis of 2008 to 2009 saw the quarterly price fall peak at close to 6%.
Therefore, we can safely predict that the immediate impact of Brexit will be somewhat constrained, and if anything the uncertainty over when Article 50 will be triggered has immobilised the economic landscape rather than weakened it.
It’s been suggested that the UK leaving the EU did not only show Britain rejecting the European Union, but “also set off a cascade of events that could spark global economic chaos, remake the western world, reverberate through November’s presidential election and challenge US security for years.” As many may know the American election is due to take place within the next few days, Donald trump who stands against Hillary Clinton was one of those who favoured Brexit and believed that America should do the same. Following the announcement of Brexit Donald Trump stated that he “just arrived in Scotland. Place is going wild over the vote. They took their country back, just like we will take America back. No games!” He further went on to say that “come November, the American people will have the chance to re-declare their independence.
Americans will have the chance to vote for trade, immigration and foreign policies that put our citizens first.” This shows that the Brexit vote could in many ways have worked in his favour. However Clinton was not as approving, in her first reaction to the news from Britain, she sneakily took a swipe at Trump, though not by name, advising Americans to respond to the vote by coming together “to solve our challenges as a country, not tear each other down” and expressed that there are many differences between the seething political scenes in the UK and the US. Clinton has also stressed further warnings who fear that Trumps “America first” stance will send shockwaves through the global system.
There has been a lot of speculation in recent months over the impact that the American election will have in the grand scheme of things. In many ways the election can be compared to the Brexit referendum. On the one side you have a traditional choice, whose success would be due to people sticking with what they know; a safe choice so to speak.
On the other side you have an outsider whose ideas and beliefs have spread fear among many. It has been argued that if Trump becomes President there will be much larger things to worry about in the world than the mere Brexit decision. Therefore, it is extremely hard to predict what will take place in the coming weeks and months, but the fate of the world, not only the United States is in the hands of the American voters.