A year ago, UK Prime Minister Boris Johnson described the signing of a post-Brexit trade agreement with the EU as a historic and valuable moment in what he said would fulfil the British wish to regain their right to self-determination. But it seems that over the past year and with the economic consequences of Brexit, the number of its opponents has increased day by day.
most of the British population would vote to rejoin the EU
The Savana ComRes poll last November show that most of the British people would vote to rejoin the EU if the Government held a referendum. In June, only 49 per cent of those polled were interested in Britain rejoining the European Union.
Decreasing the credibility of the Boris Johnson government in public opinion
In recent days, Boris Johnson’s key partner in the Brexit negotiations, David Frost, has resigned to become the third Brexit minister to step down. In his resignation letter, Frost lamented the UK government’s economic approach after Brexit and called on the Prime Minister to use the Brexit opportunity to turn the UK into an entrepreneurial economy and reduce production taxes, contrary to current practice.
Decreased British trade with the EU
UK’s trade with the EU has declined since the country left the EU, and companies have been affected by the new rules. The results of a study by the Centre for European Reform show that the UK’s trade with the EU was 15.7 per cent lower than in October if the UK continued to join the single market and the EU customs union. Although this figure does not seem to differ much from the UK government’s report in 2018, which predicted a 10% drop in trade, the fact is that UK will implement many border-customs controls and post-Brexit trade bureaucracy by 2022. Postponed, the establishment of which will further reduce bilateral trade from next summer.
UK fails to sign free trade agreements.
At the same time, UK has made limited progress in signing free trade agreements with non-European countries. UK signed its first fully independent trade agreement with Australia and reached a preliminary agreement with New Zealand. But economic growth from both deals is expected to be limited. A free trade agreement with the US has become very difficult since Donald Trump’s departure from the White House, and signing it seems impossible in the short term.
The decline of UK economic growth after the Brexit
Even before UK’s complete secession from the EU by the end of 2020, the budget cuts the size of the British economy by about 1.5 per cent, according to estimates from the Office for Budget Responsibility. The decline was due to declining trade investment and the transfer of economic activity to the EU. According to the Government, since implementing the UK-EU trade agreement, the decline in bilateral trade has reduced the UK’s economic growth to 4%; The rate is in line with pre-Brexit forecasts.
Brexit the cause of labour shortages in UK
The Brexit has exacerbated the labour crisis in UK. 200,000 Europeans left the UK in 2020 due to stricter immigration laws and the deepest recession in three centuries. This has led to labour shortages in sectors such as restaurants, hotels, and food and consumer goods retail. The lack of European drivers triggered a wave of fuel shortages last summer, forcing the Johnson government to ease visa requirements for workers in EU member states.
The impact of choice on the financial market
The Brexit forced banks and financial companies to move at least some of their operations, staff, assets or legal entities out of London to the EU. According to a survey by Ernst & Young, about 7,400 jobs were lost in the London financial market, 200 fewer than the company had previously estimated and much lower than the pre-Brexit forecast. The decline in banking and financial services was estimated at 10,000 to 20,000. British financial companies are still waiting for full access to the EU single market, which relies on EU licensing. But progress in that regard has almost stalled due to the blurring of EU-UK relations over Northern Ireland.
The long-term threat to the British economy
It is a long-term threat to the British economy from the US, which is expanding its trade relations with the EU; An action that increases the chances of prosperity and job creation in the EU. ” The Bank of England is carefully assessing the risks posed by the omicron Covid-19 variant in light of its surprise decision to raise interest rates,” said Huw Pill, chief economist at the Bank of England. The Bank of England raised its key interest rate from its all-time low of 0.1 per cent to 0.25 per cent, challenging market expectations to wait until the new year before the interest rate cycle begins.
A sharp rise in inflation in the UK
Inflation reached 5.1 per cent in the 12 months to November, the sharpest annual slope in 10 years, well above the bank’s 2 per cent target. The Bank of England now expects consumer price increases to reach a yearly peak of 6% in April 2022.
In general, the Omicron variant has created a new level of uncertainty in assessments of economic conditions, the outlook for inflation, and labour market developments. The BoE must now proceed with caution and assess whether Omicron can reverse the dynamism of the UK economy.
It may take years to fully report on the consequences of UK’s withdrawal from the EU after four decades of close relations. However, some of the results of Brexit over the past year seem remarkable. After 47 years of membership, UK officially left the EU in early 2021. The Government says it has reached an agreement on trade cooperation with the EU. But over the past year, the UK economy has been deteriorating, and many industries and businesses in the UK face bankruptcy. They blame the Boris Johnson government for their catastrophic economic situation.
