With the Brexit referendum in 2016, the United Kingdom has changed. The prime minister David Cameron resigned immediately after the results of the vote, having the party choose Theresa May as his successor. She then held an early general election in the hopes of having more control for their exit from the European Union but ended up losing their majority and having to compromise with the Democratic Unionist Party. The conservative government has faced heavy criticism and declining approval ratings, yet the fate of the United Kingdom continues to face the path of exit from the European Union. The outcome of this decision has one of success or utter failure.
The multilateral trade agreement of Britain with the European countries, has encompassed all of the United Kingdom’s economic sectors, leading to drastic need for policy change with the upcoming policy changes. Economists believe that the road ahead will be nothing but failure for the following decade to pass, with 12% more exposure to risk, being 4.6 times higher than the European Union. The higher costs of imports and production is bound to lead to an economic spiral, unlike how the United Kingdom media present it as. With mercantilism theory that EU countries will want to sign individual trade deals with the United Kingdom, but these were considered incorrect in studies done by the London School of Economics. As it currently stands, European Union fees will continue into 2020, with a two-year transition plan and a total exit fee of £3 million.
Theresa May has been hesitant to go on the path of a hard Brexit, making indications that she would be in favour of a soft Brexit. Working in this way though would favour its opposition the Labour Party which has always stood along such an ideal. No party has stated that they will oppose Brexit, which as they say, “would be an affront to democracy”. The government is in disarray and not only in Britain, but also in Scotland. They have expressed they distaste to the Brexit movement and their desire to remain in the European Union. As it currently stands, they do not have the authority to leave, but they threaten that they will hold another referendum to leave the United Kingdom.
Although most economists believe that there is no benefit to Brexit, there are some that don’t agree with this tought process. The leave from the EU will allow for access to other markets rather than European countries, not adding regulations that restricts itself to one market. Contradicting ideas of failure, there have been record high levels of inward investing, far greater than before the referendum. It is problematic that most economists follow a consensus without looking at the alternative no matter how unlikely it may be. The outcome now seems to be the latter. Patrick Minford who works for the Economists of Free Trade concluded that if the United Kingdom takes control of the market and move rapidly with rebuilding relationships and infrastructure to fit new trading policies would increase the GDP by 7% (£135 billion).
The future is bright for the United Kingdom, but there is still the possibility of a damaged economy which will shake international markets. The unstable markets and government show a fragile future where only time will tell what road the United Kingdom will take.