The economic effects of Brexit in Euro region was the major topic of discussion when the economists declared that the Brexit will drastically bring down the per capita income in the region. Withdrawing members argued that when the contributions are ceased, then it would lead to tax cuts or an increase of spending in the government. This process has led to both long term and short term effects and has led to barriers in trading with the European Union. Brexit led to a very significant change in relationship with the European Union states and also opened the platform of negotiation of trade deals with non EU states. Assumptions were made that the exit from Brexit will lead to a very significant economic_effects_of_Brexit.

The migration effect of Brexit was the most felt on the Eastern European member countries whose employees are approximately 1.2 million by the end of 2015. The most dominating groups are Poland, Romania and Lithuania consecutively. After the Brexit, the net annual immigration in the UK fell by approximately 106 000 attributing to the EU citizens especially those from the Western region. The government of Poland encourages emigrant’s workforce to return to Poland but political and regulatory systems prohibits them and they are forced to stay in the UK or migrate to either Berlin or Amsterdam. The increase of employees coming from the East would drastically benefit states such as Germany economically but might lead to a negative effect politically.

Residents of British in European Union have suffered the consequence of losing their citizenship rights but are unaffected due to withdrawal agreements. Evidence provided by British lobby group that represents British residents in EU to the House of Commons as many of them had to implement systems that document the future rights of the British citizens have no clue about their future obligations and rights. The EU citizens were launched for registration system and more than 3.3 million people were given resettled and settled status to remain in the country after the Brexit process.

The referendum result showed it had pushed the UK inflammation by a whole 1.7% in the year 2017. This led to an annual cost of 404 Euros in an average British household. The estimated economic cost voted by Brexit was 2% of Gross Domestic Product. In December 2017, during the financial times analysis, the referendum by Brexit results had a reduction in the national British income by a whole 0.6% and 1.3% Gross Domestic Product. Economists estimated that the uncertainty surrounding Brexit had a reduction in investment of businesses by approximately 6% of points and this led to reduction in employment by 1.5% points. Brexit led to uncertainty about the UK’s trade policy in the future which reduced international trade in Britain from June 2016. European firms faced a reduction in new investments in the UK and the British firms increased substantially offshoring to the EU after Brexit.

The Bank of England and other banks in EU after a short term macroeconomic forecast were too pessimistic of what would happen after the Brexit process. It was assumed that the results from the referendum results would lead to very great uncertainty in the markets and also lead to a reduction in consumer confidence than before. The macroeconomic effects are seen to be unreliable because academic economist are not concerned about it except for banks. There is a comparison of short term economic forecasts to that of weather forecasts in that the long term economic forecasts are akin to forecasts in climate because of the methodologies used in long term forecasts are robust and well established.

Leaving the European Union will greatly have an effect of the British economy in the medium and long term basis. There was an agreement among the economists that the survey showed a drastic reduction in the UK’s real per capita income. In the year 2017 and 2019 led to GDP loss of about 1.2% to 4.5% in the UK and also a cost of between 1-10% in the per capita income level of UK. There is a difference in whether the UK decides to a hard or soft Brexit. There was leakage of Brexit analysis in January 2018 by the UK government and it showed no growth in the economic status by 2-8% in the 15 years after the Brexit and this also depends on the leave scenario. Economist argued that being a member of EU had a very strong positive effect on trade and this would make the UK to be worse if it exited the EU. Economists who are considered under a hard Brexit and hence reverts to World Trade Organization rules, a third of exports from the UK to the EU would be absolutely free, a quarter would face very high trade barriers and also face significant exports risk of tariffs in the 1-10% range. There is a study that examined the economic impact of Brexit which led to reduction of migration and this led to a negative impact on UK GDP per capita and also reported a positive impact on low skill service sector wages. The changes are so important as it is very unclear of how foreign investment and trade changes would interact with the immigration sector.

The divorce bill also played a major role in the outcome of Brexit because of its fiscal impacts. Theresa May that the finances took the first place as of key importance that surrounds Brexit and thus followed by laws and borders. The Divorce bill is described as a financial obligation that the UK are supposed to pay as their liability in the European Union. For example it is the inclusion of the unpaid contributions to the European Union multiyear finances. An estimation has showed that at least 39 billion Euros would be increased by the year 2022 but there is no figure for the bill that is currently set.

After the Brexit referendum, there was shifting of company assets, businesses, offices and British operations and the Europe continent. Banks had made more than one trillion dollars transfer out of Europe whereas insurance and asset management companied had made a total of 130 billion dollars after Brexit. 239 of these moves were confirmed to be related to Brexit which included businesses and staff. The highest number was to Dublin and then followed by Luxembourg, Frankfurt, Paris and lastly by Amsterdam.

The withdrawing states that not contributing to the EU would lead to tax cuts and the government spending would increase. The treasury figures reported that the UK gross national contribution had increased to 18.8 billion and that is about 1% of the GDP. The UK spending habit is not the same as other states as it is reported to be less, there was negotiation for rebate. The EU spending habit was put into account and the estimated contribution of net was about 8 billion Euros for the next five years which when calculated it is about 0.4% of the national income. Reports revealed that forecasts majority on the Brexit impact indicated that the European government would have less money to spend even after withdrawing from the EU.

The world pension experts that the long term economic prospects in the European region remain very high and this is due to the attractiveness of the country and foreign direct investment. The UK economy is believed to remain robust if Brexit happens. It’s economic attractiveness will not depreciate and there is no interest in trade war with London as it was reported by the director general of World Pensions Council, Mr M Nicolas FIRZIL who is also the advisory board member of the Infrastructure Facility of the World Bank Global. It is further noted that the UK’s decision to leave the European Union which includes control over trade policy in Britain and its regulation could lead to an outweigh of short term uncertainty observed by the state scores. Foreign firms view the UK as a gateway to other European Union markets and this makes the UK benefited due to its attractiveness as a location for the activity as it is a major FDI recipient. When we consider the per capita basis, Europe is a front runner among the bigger economies with more stock and it’s three times larger than other states.

Upon opening of the London Stock Exchange in 24^th June 2016, the FTSE dropped from a whole 6338.10 to 5806.13 and that is just after ten minutes of trading. It later recovered to 6091.27 after ninety minutes and again recovered to 6162.97 by the end of the day. It was reported that more than two trillion U.S dollars was lost in equities markets. By around July, the FTSE had increased more than the pre referendum levels and this shot to a ten month high hence recorded the largest single week in index since the year of 2011.The general global financial shift in the currencies was declared risky and the U.S dollar and the Europe’s withdrawal from the European Union would affect the trade relations and the economic state of many states. Forecasts detected a downturn of economy since the referendum was declared inaccurate and there was a strong market performance noted with the Brexit.

The economy and business during Brexit was affected significantly. Though on June 2016, George Osborne, the Chancellor of Exchequer reassured the financial markets that the European economy was not facing serious problems. The media reported that that after the Brexit, the business would deteriorate by two thirds hence produce negative results and a depreciation of the sterling and also the FTSE 100. Businesses in the British states reported there would be cuts in the investment sector, freezes in hiring and the redundancies incurred would result with the necessity to cope with Brexit results. The European was declared fundamentally strong, competent and open for business as declared by George Osborne.

Phillip Hammond, the successor to George Osborne told the BBC News that the Brexit brought uncertainty to the economy. And that it was very important if signals of reassurance were sent as an encouragement to spenders and investors and also declared no need for emergency budget. The weaker pound was expected to benefit the pharmaceutical, defence firms and aerospace companies. Black Rock announced that Europe would undergo recession in late 2016 or early 2017 as a result of the Brexit and that there would be depreciation in the economic growth for the next five years due to reduction in the investment sector. Ey Item Club based in Europe revealed that the country would suffer severe confidence effects on business and spending. It reduced its economic forecasts for Europe from 2.6% to 0.4% in the year 2017 and 2.4% to 1.4% in the year 2018. Peter Soencer, the group’s chief economic advisor reported that there would be severe long term implications, and Europe only have the option to readjust to a long term reduction in economy size.

Richard Buxton, a senior city investor reported a mild recession. International Monetary Fund lowered its economic growth forecast for Europe from 2.2% to 1.3% in 2017. The Bank of England released a report in July 2017that the economic growth forecast for Europe reduced from 2.2% to 1.3%. In July 2016, it was reported that the there was a rise in uncertainty since Brexit. Sharp economic decline was noted. A third of the contacts that did the survey reported a negative impact the year that followed. Three months after economic data turned positive after the referendum, it was noted that the predictions and negative comments did not materialise. Brexit started having an effect on inflammation in December 2016. Europe’s economy is reported to be 2.5% lesser than it would have been if they did not exit the European Union.

Mark Carney, the governor of the Bank of England reported to a press conference that the requirements for the capital of the largest banks are reported to be ten times higher before the financial crisis occurred. Stress testing by the bank of England are very severe than what the state was facing. The banks have the flexibility they require to continue lending to the European businesses and homesteads during the difficult times. Institutions are expected to draw the funding appropriately. The Bank of England released funds in lending by reduction of countercyclical of buffers in capital and should be withheld by banks.

There is a warning by world economists that Europe’s future will depend on whether the UK will see the need to obtain passporting for the rights of the British state from the European Union. For the banks which will not be able to obtain the passport rights have the option of relocating to Financial Centres within the European Union. John Armour, Law and single market professor declared that a soft Brexit would lower the risk option for British’s industry in finance as compared to other options in Brexit. This would make financial services firms to have to rely passporting rights regulations. The fund management industry, often constitutes of an incommensurate share turnover for Dutch, French, and German and asset managers from other Continental European states. The imbalance caused by asset management companies can lead to Britain having negotiation leverage.

International Monetary Funds reported Brexit marked the materialisation and also reported a down side risk to growth of the global. And this led to uncertainty of whether the UK would leave the European Union. The outcome was worse. Christine Lagarde reported that any deal won’t be good and the process by which services, goods and the citizens move around the European Union and UK without problems and restrictions. There was an assumption that the projections were timely in the European Union. Lagarde said that a there would be a crash and disorderly would lead gowth cuts, a depreciating economy and deficit hence leading to a reduction in the European economy. If the impediments are larger of trading in the relationship, the more costly it would be. It was bad for the economy to have uncertainties and if only they were removed it would be better.

In July 2016, city of Chengdu, China there was a summit of finance ministers of major economies gave a warning that Europe plan to leave the European Union was drastically adding to the uncertainties in the economy globally and requested that UK should remain in the European Union in order to reduce turmoil. Terrorist acts were on the rise and Brexit was concerned. Philip Hammond said that the state would minimise uncertainty by giving out an explanation in future.

Philip Hammond concluded that the uncertainty will come to an end if the deal is signed. And also he hoped that the European Union and UK will make an announcement to some agreement by the end of 2016 and also discuss on how to stage the Brexit. He reiterated that steps would be put into consideration of stimulation of the economy which includes tax cuts and increase on spending and this is without specifics. The UK also planned to increase bilateral trade with the Chinese continent, a report by the BBC. Mark Carney, the chairman of the Financial Stability Board and also governor to the Bank of England wrote a letter in July 2016 to the Minister of Finance that attended the G20 Summit and also to the Central Bank Governors pointing out the global economy problems which had weathered and the economic effects of Brexit. And the steps which were being taken by IFB.

The financial system still continued to function well despite the uncertainties and risks encountered which reported an endurance in benefits of the G20 post crisis forms. He put an emphasis and the value of the specific reforms that was to be put into consideration by the Financial Stability Board which on later stage reported a dampened aftershocks on the world crises. The resilience faced that faced the stress demonstrated the benefits of endurance of the G20 Post crisis reforms. The difference in the GDP is contributed by additional non-tariff barriers caused with the EU which caused a differing technical regulations and standards. This analysis a much minimised positive effect on the changes of the GDP to domestic regulatory policy and the new trade agreements including many other countries. The government did not put into consideration is the future domestic policy choices and also did not include trends globally for example technological advancement and demographic trends.

In conclusion, since the Brexit, enough time has already passed in order to make some conclusions about the Brexit. The European Union must be able to make a contribution to the generation and stability and also build confidence inside and outside its borders. The presidents of the European Council Commission, with no formal notification from the UK, then that shows that there will be no further negotiations nor exploratory talks. This is very fundamental because since something that appears transcendental must be clearly addressed and in due respect of the Article 50 of the Treaty of the European Union which states that the a state trying to leave must notify the European Council first. 43 years due to incorporation of the European Legislation by the UK legal system, a separate size of production may not sound easy.

The European Union and the United Kingdom are very important trade partners. A larger percentage of the British Exports are destined by the Union and the UK provides a a very large trading space for the companies in Britain thus Brexit will significantly destroy companies located in Britain and affecting all aspects of business and economic growth most importantly those that fall under the financial sector which attributes to the importance of London. The agreements that were signed by the European Union indicated that the regulation of trade and investments among its state members will stop to apply to the UK hence affecting its economic state and rate of production. The agreements that were signed by the European Union in regulation of trading and investments relationships between its members of state and other countries and groups.

Brexit will be forced to clear impact for UK regarding its strategy in security most particularly its measures which is against the act of terrorism and organization of crime and this will lead to it losing all the adopted measures that relate to Justice and Home Affairs and which must also lead them to leaving Europol. Brexit has led to the UK’s internal Regional cohesion and this resulted in decisively influencing the status as an EU member.