Brexit refers to the referendum where Britons voted to exit from the European Union and this had implications for both EU and Britain. The essay will explain factor which contributes to Britain exit which includes national autonomy, Britain was paying more and immigration.

Moreover, Brexit had a more negative impact on the economy of Britain because the UK received the most foreign direct investment and because of Brexit, this could lead to disinvestment. Also, the sterling collapsed from 1.50 to 1.33 within hours after early results were announced and the stock market crashed. More so the increase in trade cost since Britain has a small market means that Britain will be affected by the tariffs imposed by the EU.

The main reason for Britain to exit the EU was mainly because of the issue of sovereignty which was affecting the total autonomy because Britain did not have control of its own borders because the power was ceded to the cumbersome bureaucracy of the EU. This supported by gylfi et al that the arguments for leaving were centered on immigration and national autonomy[1].

This showed that Britain though a member was affected by the regulation of the EU for the free movement act which has resulted in cultural hatred between races which therefore explains why Britain exited so that as a country it can attain full autonomy of its country. More so other scholars credit the Islamic bombing as a pretext for the loss of sovereignty in Britain which resulted in more people obliged to vote out.

Busch et al[2] supported the above argument by stating that public debates are often dominated by political considerations about sovereignty and regulatory autonomy. Therefore one can argue that the issue of sovereignty played a crucial role in the exit situation of the UK since Britons could not have total control of borders which means that people freely move around Britain which was not good and a curse for joining the EU.

In addition, immigration was the other cause for the Brexit because people migrated to the UK even though they were working but this affected the wages of the local citizens which means that the exploitation was now affecting both Britons and immigrates.[3] Gylfi et al state that immigration having a small negative effect on the lowest wages.

This means that immigration was now degrading the living standard of the Britons since the falling of wages affected Britons but however some scholars articulate that foreigners did not cause wage falls but contribute to the GDP of the country is a great way. The free movement of people was a result of the EU laws which promote EU citizens to move freely and work anyway which means that Britain was a net importer of workers.

More so Gylfy[4] argues that globalization has benefitted the economy of London more than the rest of the UK and that the Brexit vote is a protest by the rest of the country against free trade and free immigration. Therefore one can argue that immigration was an important factor for the exit of Britain from the EU.

Furthermore, the other fact for leaving the EU was because Britain was contributing more to the EU as compared to other EU members.[5] John Ries stated that Britain was paying more into the EU than it was receiving about ten billion net. This means that Britain did not view its role as being valued in the EU because the regulations affected were of great importance at the same time EU regulations were affecting the autonomy of Britain. Therefore one can argue that the exit of Britain was a form of a protest against the EU to revise its law against Britain.

Some scholars against this view for instance [6]Fasun argues the UK received the most foreign direct investment of any European country and was second only to the united states in terms of the stork of the inward FDI around the world. Therefore this proves that Britain benefited more from being in the EU because much money was invested in Britain and this explains why London was the financial hub of Europe.

More so the implications for the exit EU on the British economy have some negative impacts such as the collapse of the sterling. This means that the exit of Britain affected the economy and currency of Britain which was proved that the exit had some negative consequences on the economy of Britain.

According to John Ries [7] the sterling collapsed from 1.50 to 1.33 within hours after the early results were announced. Therefore the collapse of the currency proves that the exit of Britain had a negative effect on the economy of Britain which one can support by the resign of Prime Minister D. Cameroon. Also the weeks after the exit, the pound continues to slide which proves the above fact that the exit had a lot of negative impact on Britain and influence the investors who panicked because of the collapse of the currency which resulted in a market crash.

In addition, the other impact of Brexit on the UK was the clear lack of confidence from the foreign direct investors. These risks clearly involve possible disinvestment as businesses make contingency to move parts of their business to bases within the European Union according to the house of commons [8]. This shows that the exit of Britain had a large implication on the economy and this will result in Britain lagging behind other economies of the world.

Therefore this means that Britons underestimate the foreign direct investment from other countries but in actual this was true and the importance was also minimized. More so the direct investments had helped London to be the financial hub of Europe. People also underestimated the volume of foreign direct investment by other EU countries according to Gyfyl et al[9]. This means that funds for companies in Britain will be limited by the reason that Britain does not have access to the E.U. More so companies will relocate because the market of Britain is small.

More so the increase of trade cost between Britain and other countries is another impact of the exit of UK from the E.U. Also, this means that business is now affected in the United Kingdom because the other deal that of America is far away which means trading with the USA will be expensive. The increase in trade cost between the United Kingdom and Europe following the Brexit can be divided into three categories which include higher tariffs on imports, higher on non-tariffs, and distance according to the House of Commons [10].

Therefore one can argue that the exit of Britain will cost it economically because the tariffs will make British products not have access to the European Countries at the same time it will cost much to buy. Also, this can be explained by the ongoing talks between E.U and British countries to try to avoid such impacts. The UK government has invoked the idea of global Britain where the UK by inter alia establishing new trade agreements arguably would be able to offset the Brexit for the UK economy according to J . Ries [11]. One can argue that the exit of the UK had a large negative economic impact on both UK and the E.U countries. These countries also experience a trade decline but to a lesser extent than for the UK because the UK market is smaller than that of the E.U.

In addition, some scholars argue that the lowered pound had enabled tourism in the UK which means that exit from the E.U had revived the tourism sector but how however this had a negative impact economically because this has raised the importation cost of goods. The lowered pound made travel to the UK more affordable thus increasing tourism, the decreased value of the pound raised imports cost for British citizens according to Gil Turner[12].

Therefore one can argue that exit of Britain had negative impacts on the economy since the rise of imports will create a balanced trade between Britain and other countries. Dee and Smith see some new opportunities for the UK free of the constraints of operating within an EU framework in the UN’s diplomatic processes. These scholars defend the above negative impact stating that Britain will actually benefit in the future. Also, the E.U regulations were continuing to divide the public of the UK which was much more dangerous for the economy and the solution was, therefore, Brexit.

Furthermore, UK exit from the E.U could result in unemployment since more companies will be forced to relocate from the UK to other countries that are E.U members. This supported by the lack of confidence of companies who are not sure of the future in the UK since the market is small and does not have access to E.U countries. Less new investment and the danger of relocation of production could put a dent in employment in the UK according to Daniel Wincott et al[13].

This supported the view of high unemployment in Britain because relocation will affect production output and men’s power required to produce which results in a reduction of the UK GDP. Therefore one can argue that the relocation of companies in the UK will affect the industrial growth of the UK which results in the loss of jobs which is not good for the economy. Also, the relocation of companies will not affect the workers only but also banks since companies will not invest in the UK which means that exit of the UK from Brexit was not good for the economy per ser.

More so the exit of the UK from the E.U had caused financial instability in the British currency which proves that negative impacts dominate the exit plan. The Bank of England, in particular, has warned that Brexit could result in financial instability that could have damaging macroeconomic effects because of the financial openness of the UK[14].

This can be supported by the collapse of the pound just after Britain voted to exit the E.U.The stability of the pound now people are not sure whether this will continue or worsen because prior to the exit pound was a stable currency more than the U.S dollar. Also, the fact that the stock market crashed means that the future of the UK is uncertain for the whole world and for companies. More so the collapse of the pound has resulted in the high cost of imports which mean that the living standard of the UK will drop and companies will not be able to purchase raw material which will result in more people losing jobs.

All in all the causes of the Brexit for the UK were dominated by the following facts such as nationalism, immigration, loss of sovereignty to E.U and UK was the largest contributing member. More so the impact for Brexits includes the relocation of companies, collapse of the pound, stock market crash, and lack of confidence from UK banks and Investors. Also disinvestment from Foreign direct investment.

[1] Arnorsson, Zoega, Gylfy  ,On the causes of the Brexit, Cesifo working paper,no.6056,2016

[2] Busch, Berthold, Matthes, Jurgen,:Brexit :The economic Impact-A survey, Cesifo Forum, ISSN 2190-717,Vol.17,Iss.2,p.37,2016

[3] Arnorsson, Zoega, Gylfy  ,On the causes of the Brexit,Cesifo working paper,no.6056,2016

[4] ibid

[5] Http://

[6]F.Fasani  , Refugees and Economic migrants ,Facts ,policies, and Challenges , A ebook,2016


[8] House of Commons (2016),Leaving the EU, Research paper 13/42,1 July 2016

[9] Arnorsson,Zoega,Gylfy  ,On the causes of the Brexit,Cesifo working paper,no.6056,2016

[10] House of Commons (2016),Leaving the EU, Research paper 13/42,1 July 2016


[12] https//:perma.cc556w-7pmv

[13] Daniel Wincott,John Peterson and Alan Convery,Introduction: Studing Brexit causes and consequences,The British Journal of politics and International relations,  vol .19,p.431,2017


author avatar
William Anderson (Schoolworkhelper Editorial Team)
William completed his Bachelor of Science and Master of Arts in 2013. He current serves as a lecturer, tutor and freelance writer. In his spare time, he enjoys reading, walking his dog and parasailing. Article last reviewed: 2022 | St. Rosemary Institution © 2010-2024 | Creative Commons 4.0

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