Brexit The Aftermath
Britain, Exit, Brexit, Aftermath, Holiday makers, Families, employees, cost
How much will Brexit cost us?
Britain, Exit, Brexit, Aftermath, Holiday makers, Families, employees, cost. The Aftermath: Britain’s exit from the E.U could set the economy back by up to £65 Million. 500 extra civil servants are to be hired are set a new report from the Institute of Government suggests.
While Whitehall itself is still preparing to respond to the Brexit issue, many politicians seem to be resting on the brink of uncertainty. We know that there is a huge divide in the government on this issue. However ministers are urged to try and reduce the gap in order to strengthen unity and to negotiate strategy.
In addition, Theresa May needs to determine the process and identify time-scales with the intention of reaching a position on which she can negotiate terms. The PM’s declaration on Sunday that Article 50 is going to be triggered by the end of March next year has sent the pound to a new 31-year low against the dollar. It also hit a five-year low against the euro today on Wednesday at €1.1308.
Britain, Exit, Brexit, Aftermath, Holiday makers, Families, employees, cost. Summer holidays are over. However, many who changed their pounds into euros or dollars after 23 June noticed that their money went less farther than before. Many airport bureau de change were even offering less than €1 for £1, despite the market exchange rate being more than €1.14. Those preparing to book winter breaks overseas or foreign holidays for next summer early will soon notice a rise in prices. The Current situation leaves us in uncertainty and lacks clarity on the matter of what to expect next. This is extremely unsettling for those who run businesses in Britain.
Inflation is still low. Food prices in Britain are down because of supermarket competition. Although it is unlikely to stay that way. In contrast, prices of imported food and other goods is rising due to the sterling’s depreciation. Also the price of raw materials for UK firms, priced in dollars, is increasing pretty rapidly. The further sterling declines, the bigger the price impact on families.
British employees have seen wages finally rising in recent years. Although this is not because wages are rising because of growth, rather because inflation has been so weak. If the pound plummets further and pushes inflation up, employers are unlikely to push nominal wages up to compensate. The result will be damaging on the purchasing power of wages.
People taking out mortgages will not feel any direct impact from sterling’s depreciation. This only applies to those paying in sterling and buying in the UK. If they buy abroad they could face a problem because their money will not go too far. Alternatively, if they are buy in the UK and pay in foreign currency they will benefit.