Business Editor Emeritus
It was hard to miss the ordeal known as Brexit Over the summer. Brexit was originally an idea from the United Kingdom that some of its citizens wanted to leave the European Union.
There were many different reasons why the citizens wanted to leave, but it was mainly due to immigration issues caused by the EU. On June 23, 2016 the United Kingdom voted and agreed that they would leave the EU. This will have tremendous implications over the coming years. The most prominent of these issues will be due to tax implications for all business based in the EU and the currency decline globally as a result.
In the past week the British currency, the pound, has decreased to record lows in relative value to all other currency worldwide. This is because investors and currency traders around the globe believe that Brexit will have negative impacts due to businesses deciding whether or not to keep their headquarters in the U.K. if they also have businesses in the EU. Also companies may need to relocate thousands of employees due to the new laws that will occur when the formal split occurs.
The most important thing that is causing the pound to suffer is nobody knows what the terms of the U.K.-EU divorce will be. If they can come to sensible agreements that allow EU special trade relationships and traveling laws, then things will be much brighter for the future of the EU and the pound.
However, if they don’t come to likable terms then, they will leave the EU.
Jason Martinez, a senior international business major, said, “The pound will be a lot lower, and because the U.K. is still in a transitionary period, there will be more constraints which will put more of a burden on the pound.”
It is important to note that as of now the U.K. is still a part of the EU.
Until they declare Article 50 they will still be together. When they do declare Article 50 they create a hard deadline for both groups to sort out terms.
When article 50 is declared, it will start to show either that the EU and U.K. will have a positive relationship in the coming years or a negative one. Whichever they decide will determine how the British pound reacts. Whatever the result of the EU-U.K. negotiations, it is going to be a new territory for the politics of Europe, and no one is to be sure of what will come next.