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You are here: Home / British Sterling / Could Brexit be positive for the UK economy?

Could Brexit be positive for the UK economy?

August 17, 2016 by Rob Lloyd

Could Brexit be positive for the UK economy?
  • Weaker Pound to aid British exports and attract foreign investment
  • Higher prices to improve inflation
  • Economic releases show contradicting outlook

UK could thrive in Brexit Limbo

eu referendumWhilst we remain in a period of uncertainty for the UK, a cheaper Pound may not be ideal for those looking for a last minute holiday to Spain, but could it play a huge part in economic improvements whilst the UK navigates its way through its divorce from the EU?.

With holiday’s becoming more expensive in response to the cheaper Pound, holiday makers could look to the UK for quick breaks, keeping capital within the UK.

Foreign investment has also become more appealing, the cheaper Pound makes the UK more attractive for investment despite concerns over its future as the financial hub of the world. I do not see this changing due to Brexit, London will remain an international hub for the rest of the world irrespective of its EU membership.

And although the price of goods have risen since the vote, due mostly to businesses passing on costs to consumers, this could in fact play a part in improving inflation in the short term. Which in turn could keep the Bank of England from fiddling further with its monetary policy.

The data last month reflected a Brexit shock, the recent positive data in relation to inflation, retail sales and employment could well be a sign the UK is getting on with it, or could it be too early to tell?

It may well be too early to tell just what impact Brexit has and will have on the economy, but its no secret that nations afar are lining up for post-Brexit trade deals, Australia and the US have pledged their support, as well as Pakistan. Whilst the next few years may be hard for the UK as it navigates through the many webs of EU integration, the UK will thrive after Brexit, because the UK will have more opportunities outside of the EU and its restrictions.

 

Filed Under: British Sterling

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About Rob Lloyd

Robert brings with him a wealth of knowledge on what is impacting exchange rates, especially around the subject of the EU Referendum and the implications for Sterling and Euro exchange rates.

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