Yesterday, Britain voted to leave the European Union (EU) by a slim margin. The “Brexit,” as it has come to be known, leaves a wake of uncertainty regarding worldwide economic and trade implications. Over the next two years, Great Britain will discuss its new relationship with the continent, including trade. While these negotiations take place, Great Britain anticipates that it will take an “extended period to negotiate…trade deals with countries outside of the EU,” as explained in the document The Process for Withdrawing from the European Union.
In the short term, the disparity in currency remains the most pressing concern. Great Britain’s sterling has weakened against other worldwide currencies, which makes exports from Britain less expensive. Meanwhile, stock markets in the US, the United Kingdom (UK), and the EU have been down this morning. Brexit has also caused political quandaries that may result in direct impacts to trade. The UK’s Prime Minister David Cameron, has resigned and will leave office by October. Furthermore, Scotland voted to remain in the EU, which could invoke another referendum for independence.
Deringer will continue to monitor trade implications resulting from Great Britain’s departure from the European Union. Please direct questions to firstname.lastname@example.org.