Brexit — So How’s It Going?
Remember Brexit? That whole messy thing that the UK got itself into (we’re not judging, but yep). Well, if you’ve had a moment to spare over the last few months, you may have caught yourself thinking “Wait, how’s Brexit actually going?” Today, we’ll give you a quick overview before highlighting some of the key fundamental events happening this week.
Has Brexit made things better or worse?
Like many countries right now, Britain is facing more than a few socio-economic problems. To what extent can they be attributed to Brexit, though? Let’s find out.
Brexit and the cost of living crisis
According to a study by the Resolution Foundation, EU withdrawal is making things worse on citizens’ pockets.
The UK-based think tank and academics from the London School of Economics claim that the average worker in Britain stands to lose more than £470 in pay each year by 2030.
Added to that, the annual rate of inflation reached an unbelievable 9.9% in August, close to a 30 year high, affecting the affordability of goods and services for households.
Add that to surging petrol prices and the rising cost of a weekly shop, the pressure on struggling families is further compounding the UK’s economic problems.
Brexit and energy
UK energy bills are set to jump by as much as 80% this winter, according to Ofgem, the UK’s energy regulator. The leap means the average household will pay £3,549 per year to heat and power their homes, which may potentially plunge millions into poverty.
But is Brexit making things worse? Well, if comparing UK electricity price increases to that of its European neighbours is anything to go by — yes.
UK households are facing some of the highest electricity prices in Europe; nearly double those in France. Only citizens in the Czech Republic are paying more than the UK, followed by Italy and Estonia.
The UK’s issues started before February 2022 (Ukraine war), implying that something else is at play. Some critics argue that the fully privatised energy market is partly to blame — but that goes back to the 1980s.
Truth be told, it’s hard to totally pin the blame on Brexit with this one.
Brexit and trade
Since Brexit, the UK has signed 71 trade deals and agreements in principle, as well as the one signed with the EU. But most of these are simply carbon copies of the deals that the UK had when it was part of the EU — not exactly improvements.
The big deal that’s not yet been done and doesn’t look like being done any time soon is an agreement with the US trade — which is what many Brexiteers were looking forward to. The UK’s trade with the US amounts to around 16.6% of all trade.
The UK-EU trade deal is still intact. As the UK’s biggest partner, this was crucial. However, while there are no tariffs right now, the deal doesn’t rule them out entirely, so the future could be quite shaky on that one. It entirely relies on the UK and EU staying aligned on important issues, something that is not guaranteed.
The last couple of years showed that Brexit has damaged the competitiveness of UK exports versus those of other nations. A Britain that is less open is expected to be poorer and less productive. Not good.
Summing it up
Britain is facing a monumental challenge right now and while Brexit hasn’t helped in many cases, it’s hard to look past crises that are also inflicting untold damage on many national economies right now.
Lockdown recovery, the Ukraine war, the fear of a recession, a cost of living crisis, rising energy costs — it’s hard to separate all of these from the impact of Brexit.
The only thing we really know is that new PM, Liz Truss, has a massive job on her hands. Good luck to her!
How are you feeling about Brexit?
What do you make of the current situation? Can the UK climb out of its hole? Tweet us your thoughts at @_contentworks; and if you’re looking for regular and insightful fintech marketing content, please give us a follow!
What’s on the trading agenda this week?
A quiet but important tradingweek lies ahead for the currency markets. Here are all of the top events to take note of.
● USD — ISM Manufacturing PMI (SEP)
● AUD — RBA Interest Rate Decision
● CAD — Balance of Trade (AUG)
● USD — ISM Non-Manufacturing PMI (SEP)
● EUR — ECB Monetary Policy Meeting Accounts
● CAD — Employment Change (SEP); Unemployment Rate (SEP)
● USD — Non-Farm Payrolls (SEP); Unemployment Rate (SEP)
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The Contentworks team