On December 31, 2020, the United Kingdom finally left the European Union. Formally, it took place at the beginning of 2020, but until that day the previous rules were in force between the parties.
What does mean Brexit for England?
Until now people didn’t have a clear answer what will be England in historical prospective after Brexit. But, Boris Johnson, who played one of the most important roles in it, said that now the country has received " freedom to do business in a different way, and perhaps better than our EU friends. "
Major changes due to Brexit
- Brexit cancels the UK-EU free trade regime. Formally, Great Britain becomes the third country in relation to the European Union and even in relation to Ireland. As a result, duties may appear in the trade of the two parties that did not exist before.
- Free movement of people between the United Kingdom and EU countries has been stopped.
- Any British citizen wishing to spend more than 90 days out of 180 in the EU will need a visa.
- British police have lost automatic access to the European database of people who have committed crimes and are on the wanted list.
- Individuals and companies in England, Scotland and Wales will have to fill out additional forms, licenses and documents when doing business with EU countries.
Banking sector and fintech
It is not clear what the relationship with the EU will be for the British banking and financial services sectors. Total revenues from it make major share of the country's budget. The country's financial sector is likely to be hit hardest.
Financial companies from London will no longer have equal access to the European Union market, and it will be more difficult for them to compete with representatives of other major financial centers in Europe - Berlin, Paris, Milan, Amsterdam and Madrid.
Fintech may face the withdrawal of assets of global banks and investment companies in the amount exceeding $ 1 trillion, which is almost 10% of the entire banking system of the country. Many financial companies have already decided to change their place of registration. Thus, 275 companies from London have already withdrawn their assets and funds from the country.
Economic conditions are likely to improve as uncertainty diminishes. Meanwhile, the outlook for the real estate market for the near future remains favorable, as the supply shortage will not disappear in the medium term.
Import and export
It is difficult to make conclusions to what extent Brexit will affect the logistics of trade between the EU and Britain, because the ongoing Covid-19 pandemic has significantly reduced traffic of both goods and people across the border, and the real effect of Brexit can only be judged after its end.
One thing is clear that Great Britain is no longer part of the general policy of the European Union. The EU market is de facto protected from the products of external participants. Therefore, London will have to partially look for other markets for the sale of its goods.
In monetary terms, exports to the UK ranks third after the United States and China. Sales revenue last year was € 22.5 billion, according to Reuters.
The economic losses of the UK and the EU will be associated with the disruption of established production chains and operational ties between enterprises. Manufacturers will have to find new suppliers or face higher component prices.
Global shifts await the British economy later, as they will have several more years of transition, when the previous rules of free trade, movement of people and capital will be in effect.
In your opinion, what other industries could be affected by Brexit? Share your opinion in the comments below! I will be happy to answer any questions or submit your project to my team at Astorts Group for evaluation.
Alessandro Rocco Pietrocola is an entrepreneur and investor based in London and operating mainly in Europe, Asia and Oceania with main focus on UK, Baltic Countries, Russia, China, Hong Kong, Malaysia, Singapore, Middle East and New Zealand as area of interest! At the moment is the CEO of Astorts Group. He is an UK FCA (Financial Conduct Authority) Approved Person and is has great experience as director of regulated companies. He uses to dedicate part of his life to inspire others and help them achieve the most out of their life. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.