The decision of the British voters to withdraw the country from the European Union is an event with potential very significant throughout the world economy. The United Kingdom will certainly be the country with the most at stake, but the other EU members, in the first line, and all other trading partners in Britain will also be affected. These are the areas where the most important changes can be come to feel.
Negative reaction of bags
If it is true that, in practical terms, the actual output of the United Kingdom of European Union will take some time to materialize, one can not think that the effects of the decision taken now will only be felt over time. In financial markets, expectations regarding potential future impacts, soon begin to produce, as it was already possible to see early on Friday.
And as most of the analysis (made by central banks, international organizations and banks) is that the “Brexit” will have very serious negative effects both in the British economy as the global economy was no surprise that attended at the opening Friday of international financial markets, a day of great nervousness and heavy losses.
in the bags, the fall of the value of the shares was quite sharp in the first minutes of the session and remained until the end of the day. After losing more than 7% at the very start, the London stock market recovered progressively, ending yet the day with a decline of its main 3.15% rate.
In the other European markets the falls were higher, which shows the concern that markets have regarding the potential impact on the European economy as a whole. The German market fell by 6.82% in Paris the fall was 8.04% and in Madrid and Milan the negative impact was even stronger, with devaluations above 12%. In the Lisbon stock exchange, the loss was 6.99%.
In other continents, the environment was also not positive, with the Tokyo Stock Exchange closed with a decline of 7.92%, while New York opened the day with a close loss of 2.2%.
convulsion in the value of currencies
what is happening in the stock markets, it also happens in currency markets. Then, the main victim is clearly the pound.
In the markets is to anticipate not only a loss of importance of the British economy as a reduction in the use of the pound in trade and financial flows to scale global. So, to 17.00 on Friday, the pound lost 8.44% of its value against the dollar and 6.37% against the euro. This depreciation of the British currency will be very important (and immediate) effects on international trade and tourism, for example.
Despite having gained ground against the pound, the euro may also not get away from the “Brexit “. Markets can see out of the European Union as a clear sign of weakness of the European project and, even though the United Kingdom has never adopted the euro may be even more suspicious for the ability to keep intact the single European currency.
for now, what is happening is a decrease of 2.14% of the euro exchange rate against the dollar and 6% against the yen.
prolonged uncertainty
following the reaction of the markets, which tend to move towards a new equilibrium point, the other short and medium-term effect will be the likely postponement of investment due to the uncertainty that will live until the “Brexit” be realized in practice.
There are many questions that remain, how to know what happens to many European directives in the UK, which trade agreements that are going to be in place, which output effect in the City of London, and what the real effect on the economy of the whole process.
in this course environment, it is clear that investment (either in the UK, is of British companies in the rest of European Union) if will suffer and may ultimately influence the final effect of “Brexit” in the world economy.
limited trade
the first impacts of “Brexit” trade will be quick, since they are related to changes in the value of currencies that are already happening. British exports will become more attractive abroad and sales that other countries want to make the UK will now rely on a stronger competition from products produced domestically. The Portuguese economy, particularly its export sectors may be affected here, and the deficit that the country has with the United Kingdom tend to get worse.
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