As per the latest financial reports, it is found that financial services account for 10% of the UK’s economy. Now with the debate over whether or not Britain should stay in European Union, it is important to understand that how Brexit affect finances of an individual along with the economy of this country.
Well, the news of Britain’s exit from European Union has already resulted in turmoil in the UK’s financial market. The result was- pound hit its worse value (in last 30 years) and FTSE dropped more than 8%. Although it is evident that Britain is going to be a part of European Union for next two years, but still this decision will distress finances of British people in a straightforward way. Let’s discuss how.
Income and job
As the decision (to exit EU) has resulted in weakening of pounds, it also adversely affected financial industry and now it also has deep impacts on UK’s job sector. Most of the experts out in the financial market have been strangely constant in forecasting that the growth of UK is likely to be low outside European Union.
Most of the businesses may put off in investing in machinery, plants, jobs, etc., as they don’t want uncertainty in their business. This means that the professions and its remunerations will be lesser than that might else have been.
Pensions and savings
The stock market of the UK is going to be volatile for pretty long as financial market and other firms need some time to respond to scenario. It is also evident that anyone who is planning to take revenue via draw down or who just has retired has to make a tough choice and it is either running out of withdrawal reserves or drawing less income. On the other hand, due to consumer prices, interest rates may also go higher.
The power of pound in pocket
It seems that the execution of Brexit decision will bring some real turmoil and uncertainty in Britain’s financial market and thus it will badly hit finances of an individual. The latest reports suggest that British pound fell 7% against Euro and 10% against US dollar on foreign exchange market.
If this remains same or if there is a slight increase in the statistics then peoples out in Britain have to pay more for the goods which they are importing like oil, petrol, luxurious cars, clothing, etc. Also if they plan any holiday in forthcoming months then then have to pay more as the value of pound have declined.
Mortgage and your home
As per the prediction of the International Monetary Fund (IMF), price of houses in the UK can observe huge drop out after the execution of project-Brexit. So, it is a matter of deep concern if you are one of them to have your own home. But, it could be fascinating news for the younger peoples who have been trying hard to get their own home.
On another hand, while savers would be expecting a rise in interest rates, it may also result in increased mortgage repayments for debtors. Along with that, it may also elicit retrievals.
So, these are some of the ways through which Brexit can affect the finances of an individual in the United Kingdom.