It’s been over two months since the British public voted to leave the EU. The country has been awash with uncertainty, but one thing’s for sure, our decision to leave will change the state of the economy and British society well into the future.
We have now entered into a complex web of negotiating our place in the world, and the British Government has started their journey to unpick and process the various paths possible in life outside the EU.
But what do we now know about the effects of our decision to break free from the union?
Changes to the economy
After the pound took a steep nose dive on June 24th, many believed it was the start of another financial crisis. However, share prices have now recovered and the FTSE 100 is even trading higher than before the referendum.
Retail sales figures for July are up on the same period last year, and the Bank of England have announced their own measures to stimulate economic growth by cutting interest rates from 0.5% to 0.25%.
Although the pound is still down around 13%, a lower pound makes exports more competitive – a potential advantage to further encourage economic growth across the country.
Jobs in Britain
The UK government has not guaranteed or given much insight into the status of EU nationals living in Britain. Those who have permanent residence – a status granted after living in the UK for five years – will have a right to live and work in the country.
However, for other EU citizens in Britain, a reciprocal arrangement would need to be agreed between the EU and the UK. Considering the volume of British nationals living and working in the other 27 member states, it would make complete sense for the EU and the UK to come to an agreement benefitting both sides.
In response to Britain’s decision to leave, the Recruitment & Employment Confederation’s Chief Executive Kevin Green said: “We need to ensure that British businesses continue to be able to get the people they need to fill the jobs available. Access to talent is absolutely vital to sustainable economic growth and prosperity. In sectors such as healthcare, education, hospitality, construction and manufacturing, workers from the EU are vital and any change to our immigration system needs to recognise that.”
In addition, Mariano Mamertino, an economist at indeed said: “UK employers have benefitted from the ability to recruit talent from overseas, and many Britons have seized the opportunity to live and work in other EU countries.
While it’s unlikely that the shutters will suddenly be brought down on the English Channel, the free movement of workers has clear economic benefits – and it’s essential that British businesses can continue to be able to get the people they need to fill the jobs available.”
The state of immigration
Prime Minister, Theresa May, says she is committed to bring net migration down to a sustainable level. That’s the difference between the numbers leaving and entering the UK, which currently stands at 333,000 a year. Theresa May defines a sustainable level at below 100,000, and part of the negotiations will be to discuss how these details could be feasible.
What we don’t know yet
We still don’t know exactly when we will be leaving the EU. The Prime Minister has announced Article 50 will not be triggered this year, but there is currently a High Court case in process to argue who in fact has the right to invoke Article 50.
We will not know what impact Brexit will have on immigration until ONS data is released in February 2017.
It is still uncertain as to whether there will be a Brexit recession, as these figures will not be available until late October. The Bank of England doesn’t think a recession is likely, but there were already signs that the UK economy was slowing down before the referendum.
It’s clear the UK Government will continue to negotiate our relationship with the EU for many months to come. Any changes will be gradual and it is extremely unlikely that any EU nationals will be sent home.
EU nationals are protected by certain legal rights and will continue to enjoy those rights unless both parties agree to terminate the predefined agreements. As many UK nationals live and work in the rest of the EU, it is highly likely we would want to maintain that positive trading relationship with the union and show our support for EU nationals in Britain.