The future policy in this regard can affect low-wage labour
ISLAMABAD: Brexit rattles the world’s post-war order. Britain’s vote to leave the EU has raised questions about the future of the order imposed by the US and its allies after the Second World War. Britain has been a pillar of that system as well as a beneficiary and is a test for Western alliances and institutions. Brexit will increase the prominence of Germany, already the EU’s most prosperous country.
Top central banks have given assurance that they have tools to swiftly deal with the vitality in financial markets following Brexit, as there’s huge uncertainty and instability in financial markets. Most British laws were developed based on EU rules and regulations. Huge revisions and reshuffling will be required in this regard. Official trade statistics show that the EU is the destination for about half of all British goods exports. The trade links are bigger if we add the countries that the UK trades freely with because they have a free trade agreement with the EU. These agreements mean that 63 per cent of Britain’s goods exports are connected to EU membership.
A favourable trade agreement might soon be reached as there are advantages for both sides in continuing a close commercial arrangement. Otherwise, it would be a huge trade loss to the UK and additional trade barriers may badly affect the economy.
Immigration from the European Union to the UK is currently boosting the workforce by around 0.5 per cent a year. This has assisted in supporting the economy’s ability to grow without pushing up wage growth and inflation, keeping interest rates lower for longer. The future policy in this regard can affect low-wage labour, negatively impacting sectors such as agriculture.
British Prime Minister Theresa May has firmly stated, “We will rise to the challenge.” It will be seen in the coming months as to how Brexit impacts the UK and the world.
Summer Muneeb
Published in The Express Tribune, August 17th, 2016.
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