As the Brexit talks continue to escalate, so too does the effect that Brexit is having on the finance industry. With many hesitant to take out short and long-term loans, the finance industry has experienced a slight slump that is slowly beginning to improve. Here, we're taking a closer look at the impact of Brexit on the financial sector.
Effects Of Cross-Border Trade
With Brexit talks well underway and a lot of financial uncertainty, the question about cross-border trade has been asked repeatedly. Will it be better than before? Will open trading links be available? While we cannot be sure what Brexit means for UK shipping, it is expected that the UK will experience some growth as the new plans begin to roll out. So, while there may be a couple of hiccups with how the UK trades with the world in the coming years, there's nothing to say that all will be lost despite the fear of losing free trade.
In addition, Brexit has the potential to strengthen the financial sector or to cause a temporary dip. This is due to the uncertainty surrounding what will happen when the United Kingdom officially leave the European Union in March 2019.
Financial uncertainty
For many, the idea of Brexit presents anxiety surrounding not only financial stability but job stability. This is just one aspect of Brexit that has the potential to cause long-lasting problems for those who are employed by European firms. While we are unable to confirm whether Brexit could cause people to lose their jobs, it is possible that the impact of Brexit could lead to significant job reductions. Fortunately, short term loans bad credit are available in a financial emergency, meaning that those who face financial uncertainty will be able to continue providing for their family and keep a roof over their head.
Drop Of The Pound
Due to the uncertainty of how Brexit will affect the economy of the United Kingdom, the UK experienced a sharp drop in the pound following the referendum results. Even though the pound has fallen in value since the Brexit vote, it is expected to get stronger. However, due to the current fragility of the proud, many remain hesitant. In turn, this could have a profound effect on business in the UK, with a number of EU businesses already terminating trade in order to avoid facing issues when the aftermath of Brexit kicks in the latter half of next year.
Banks Could Move To EU Companies
London is widely known as the financial capital of the world and is home to a number of banks from across the world. However, the fear of Brexit and its impacts could lead to banks moving to European countries such as Germany. While nothing is certain, it is likely that this could have a profound effect on the financial sector as it risks of losing valuable trade links and connections with major European banks such as HSBC, Barclays and Santander that help make London the strong capital city that it is today. In addition recent weeks, it has been announced that large organisations such as BMW could withdraw trade links with the United Kingdom following Brexit as a result of there being no definite answer regarding the long-term impacts of the UK leaving the EU.
As Brexit remains in negotiation, we are unable to be sure of exactly how Brexit will impact the finance industry. It's likely to be a rocky ride, but with UK economic growth on the rise, the future of the UK post-Brexit is looking positively bright.
