In a global economy that is absolutely intertwined, where the creation of a simple mobile phone requires parts that can be traced all over the world, is it worth it to strike out alone as a nationalistic power? This is the question that Great Britain is answering, nearly 4 months after the terms of Brexit became official, which effectively removed them from the European Union. In a quest to create more international trade instead of relying only on the European Union, Great Britain has upended their financial world and has changed the game of trade throughout the European Union, and therefore the world.
The economic impact of the Brexit decision has been vast, even after only 100 days. Over 450 U.K. financial services firms (including 92 money managers) have moved out of Great Britain. “Money managers and insurance firms have also transferred more than £100 billion ($138.3 billion) in assets to Europe because of the U.K.’s withdrawal from the European Union.”
As the New York Times reported, 7 percent of Britain’s gross domestic product are financial services, so this rapid loss of business is alarming and many experts say it will affect their bottom line long into the future.
“The shift in business, assets and legal entities will gradually chip away at the U.K.’s influence in the banking and finance industry in Europe and around the world, as a greater proportion of business is authorized by and conducted in the EU,” New Financial said.
Besides financial ramifications in the world of finance, the movement of goods and services has changed drastically in only four months. “Goods exports plunged by 41% and imports by 29% as the UK’s departure from the EU’s single market had a major impact.” This has affected businesses large and small in every corner of the United Kingdom.
What Has Changed
The effect of Brexit has been immediate, with goods and people held up at the border. This has affected the way businesses interact with each other, the way imports and exports are trafficked, and even something as simple as how healthcare is administered. The supply chain has seen shipping delays, customs hold ups, extra paperwork, and a general log jam at the border.