What Brexit means for the UK economy

What Brexit means for the UK economy

Xinhua News Agency, London, January 31. Overview: What does Brexit mean to the British economy? Xinhua News Agency reporter Yang Hairuo, Sun Xiaoling, Britain officially left the European Union on January 31 after more than three years.

But for the British economy, Brexit is suspected to be the beginning, British trade rules will be reorganized, the financial industry is facing shocks, and the problem of forcing supplements will also increase.

  First, free trade rules for major trading partners such as the United Kingdom and the European Union and the United States will change.

After the formal Brexit on January 31, the UK-EU trade relationship will enter a transition period. Before the end of the transition period on December 31, the UK and the EU will have 11 months to conduct trade negotiations.

If no trade agreement is reached, trade between the UK and the EU will return to the framework of the World Trade Organization (WTO).

  The European Union is Britain’s largest trading partner.

Market analysis generally believes that the United Kingdom and the EU may reach a limited agreement on trade in goods before the end of the transition period; however, the two sides have differences in fisheries, financial services and other fields, and the possibility of reaching a comprehensive trade 武汉夜网论坛 agreement within a limited time.
  The United States is the UK’s second largest trading partner after the European Union, but as the UK seeks to impose digital taxes on U.S. technology companies and the United States threatens to impose tariffs on British cars, the two parties have a long way to go to complete the free trade negotiationsgo.

  In addition, for economies that already have a free trade agreement with the European Union, Britain needs to renew the negotiations; for those economies that have already reached a free trade agreement with the European Union, Britain can start negotiations after Brexit.

  In fact, the international parts of the British financial industry may be affected.

The financial industry is one of the UK’s pillar industries. The UK is also the world’s largest net exporter of financial services, and over 40% of its exports are to the EU.

After Brexit, the access of British financial companies to EU ownership will decline.

  An Ernst & Young survey in 2019 showed that financial services companies are transferring around £ 1 trillion worth of money due to Brexit (1.

(US $ 3 trillion), and about 7,000 jobs have been transferred from London to other European cities.

  However, thanks to a long-term accumulated financial foundation and booming fintech, the UK as a part of the global financial center is still difficult to shake in a short time.

The latest report released by the City of London shows that London currently accounts for more than 40% of global foreign exchange transactions, still ranking first in the world.

  Thirdly, Brexit may exacerbate the problem of labor replenishment in the UK, especially in agriculture, construction, medical care and other industries that rely on EU skilled labor.

The extra labor force may further damage the UK’s economic growth potential.

  The British government is expected to publish a white paper on new immigration policy in March this year, hoping to implement the new immigration policy immediately after the transition period of Brexit.

The British government said it hopes to attract high-skilled immigrants regardless of nationality, but the overall number of immigrants will decline in the future.

Original title: What does “Brexit” mean for the UK economy