The UK's Biggest Gamble – Brexit
The United Kingdom (UK) held a public vote on Brexit on 23 June 2016 and saw a massive turnout as more than 30 million Brits voted. Brexit which is the term used for the UK leaving the European Union received a 52 percent vote in favor of leaving the European Union (EU) while 48 percent voted in favor of staying. It was a close vote but the fact that 17.4 million people voted for Brexit caught a lot of people by surprise.
There are many who consider Brexit as the UK’s biggest gamble as leaving the EU would bring about a number of significant changes for the UK and not all of them are positive. There continues to be a tussle in political circles over Brexit but the odds normally tell the real story. Bookmakers have opened up betting odds on the different options for Brexit and it is interesting to see what UK bettors are favoring.
What Is Brexit?
Most people outside the UK don’t really understand what Brexit is all about and it would also be fair to say that there are a lot of Brits who are also no fully aware of what Brexit entails or why there has been so much talk and such little action.
Brexit is a binding withdrawal agreement on both sides that stipulates a number of key criteria such as the rights of Brits in the EU and the rights of EU citizens in the UK; the backstop for Ireland’s borders and how much the EU was going to receive from the UK for their exit.
The UK under Prime Minster Theresa May invoked Article 50 in March 2017 which was the official process to exit the EU. The two sides started negotiations and agreed on a Brexit date for 29 March 2019. That date has come and gone but Brexit hasn’t taken place because the two sides have not been able to reach a mutual agreement. The latest date for Brexit is now set for 31 October 2019.
Boris Johnson Pushing For No-Deal Brexit
Current PM Boris Johnson has had enough of the back and forth over Brexit and has pushed hard for a no-deal Brexit. PM Johnson wants Brexit to take place on 31 October with or without the agreement. A no-deal Brexit means that the UK will proceed with its divorce of the EU even if the two parties are not able to reach an agreement.
Although the UK PM is in favor of a no-deal Brexit, it appears that Members of Parliament (MPs) are not very supportive of the PM’s views. The MPs have recently tabled a bill which would make it illegal for Brexit to take place without an agreement.
As of now it appears that it is difficult for UK MPs to come to a mutual agreement on how and when they want Brexit to take place. While the PM and MPs look to find a mutual solution, most Brits are getting frustrated as it appears their considerations are not getting the attention they want.
What Do The Polls Say?
During the last couple of months, four different polls have been carried out to gauge the current mindset of Brits on Brexit. The four polls basically asked the same questions but worded it different. The results are rather similar as one can see from below.
A YouGov poll carried out in July and August show that 44 percent of those polled oppose leaving the EU without an agreement whereas 38 percent are in favor of a no-deal Brexit. Eleven percent said they neither supported nor opposed a no-deal Brexit while 10 percent claimed they were not sure.
What Happens In A No-Deal Brexit Scenario?
If the UK decides to push ahead with a no-deal Brexit strategy, it could have a number of negative consequences on the common man. Most analysts expect the pound sterling to take a significant hit if a no-deal Brexit takes place and delays to take place at important ports.
This will result in a spike of groceries and other FMCG goods that will result in Brits paying more money out of their pockets. The Office for Budget Responsibility which is responsible for providing an independent review of the UK’s public finances believes that such a move will result in a recession.
The travel requirements between the UK and EU will also change in such a scenario. Brits will be required to get a visa to the EU if they plan to stay for more than 90 days in a 6 month period. They will also have to show a onward journey or return ticket at EU borders and prove that they have enough money to stay in the EU. EU citizens in the UK will have to apply for a settled status permit. This will put a lot of EU citizens at an inconvenience as there are a reported 3.7 million EU citizens currently living in the UK.
Healthcare is also expected to become more expensive along with importing good from the EU.
Brexit – Hard To Predict The Outcome
While analysts and market experts continue to give their take on the possibilities of what could happen with a no-deal Brexit or even with an agreement on the table, the fact of the matter is that it is difficult to accurately predict what is going to happen unless and until the UK does go through with Brexit.
Brits will not have to wait very long to see how things turnout as the 31 October deadline is fast approaching. If Brexit is once again postponed, it will be interesting to see how the UK government sorts things out and what date it establishes as the new Brexit deadline!
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.