BUSINESS

REPORT
BREXIT Crisis pushes UK business expectation
to weakest.

Prepared by:
Anandika Gill

1
Table of contents

 Introduction to Brexit. 3
 The European Union. 3
 Causes of the movement. 3
 Consequences of a No-Deal Brexit. 4
 Consequences of a Hard Brexit. 4
 Opinion of The Confederation of British Industry. 5
 Bibliography and acknowledgement. 6

2
What is Brexit?
Brexit- British exit- refers to UK leaving the EU. (wikipedia)
The Oxford dictionary awarded the honor coining this phrase to Peter Wilding .
Mr. Peter Wilding is the founder of the British Influence think tank. He also and campaigned for
the UK to remain in the EU in June's referendum.
Brexit is the June 23, 2016, referendum where the United Kingdom voted to leave the European
Union. The residents of the state decided that the benefits of belonging to the unified body no
longer significant to the costs of free movement of immigration. The vote was 17.4 million in
favor of leaving versus 15.1 million who voted to remain in the unified monetary.
On March 29, 2017, former U.K. Prime Minister Theresa May submitted the Article 50 withdrawal
notification to the EU. It gave the U.K. and EU until March 29, 2019, to negotiate an agreement.
The EU has extended that deadline to October 31, 2019.

The European Union:

The EU is an economic and political union involving 28 European countries. It allows free trade
and free movement of people to live and work in whichever country they choose.
The UK joined in 1973. If the UK leaves as planned on 31 October, it would be the first member
state to withdraw from the EU.

Why is the UK leaving? (RAND.org)

A public vote - or referendum - was held on Thursday 23 June 2016, to decide whether the UK
should leave or remain.
Leave won by 52% to 48%. The referendum turnout was very high at 72%, with more than 30
million people voting - 17.4 million people voted for Brexit.
Brexit was due to happen on 29 March 2019. That was two years after then Prime Minister
Theresa May triggered Article 50 - the formal process to leave - and kicked off negotiations. But
the Brexit date has been delayed twice.
The UK and the EU agreed a deal in November 2018 but MPs rejected it three times.
The deal consisted of a binding withdrawal agreement - which set out the terms for the "divorce"
process - and a non-binding political declaration on the nature of the future relationship between
the UK and EU.
The withdrawal agreement covered a range of things including:
 the rights of EU citizens in the UK and British citizens in the EU.

3
Consequences of a No-Deal Brexit: (reference-The BBC)

 A no-deal Brexit means that the U.K. would no longer be a member of the EU and it would
have no trade agreement. It would eliminate Britain's tariff-free trade status with the
other EU members.
 Tariffs would raise the cost of exports. That would hurt exporters as their goods became
higher-priced in Europe. Some of that pain would be offset by a weaker pound.
 Tariffs would also increase prices of imports into the U.K. One-third of its food comes from
the EU. Tariffs are as high as 74% for tobacco, 22% for orange juice, and 10% for
automobiles. Higher import prices would create inflation and lower the standard of
living for U.K. residents.
 A hard border would require all imports to go through customs. Delays at the border could
create food shortages. The U.K. is vulnerable because heat waves and droughts caused
by global warming have already reduced local food production.
 Trade and travel on the island of Ireland would become more complicated under a no-deal
Brexit.
 Northern Ireland would remain with the United Kingdom. The country of Ireland, with
which it shares a border, would stay a part of the EU. Johnson's plan would create a
customs border between the two Irish countries.
 This could reignite The Troubles. It was a 30-year conflict in Northern Ireland between
mainly Catholic Irish nationalists and pro-British Protestants. In 1998, it ended with the
promise of no border between Northern Ireland and Ireland. It would also force 35,000
commuters to go through customs on their way to and from work. Some of those in
Northern Ireland who want to remain in the EU could call for a referendum to rejoin the
country of Ireland.
 The EU favors a customs border between Northern Ireland and Great Britain. Both
Johnson and May rejected that option.
 Britain would have to pay its outstanding EU bills of $51 billion. It would also have to find a
way to guarantee rights to EU citizens living in the U.K.

Consequences of a Hard Brexit (reference-ukandeu.ac.uk)

 A hard Brexit is like a no-deal Brexit but would include a trade agreement. It's unlikely one
could be negotiated by the October deadline.
 A hard Brexit could be disastrous for The City, the U.K.'s financial center. Companies would
no longer use it as an English-speaking entry into the EU economy. The City of
London reported that 5,000 jobs could be lost. That could lead to a real estate collapse.
There are many new office buildings under construction that would sit empty. Housing

4
 prices have already started to fall. Many businesses have already left. The City's reputation
as a bastion for business is permanently damaged.
 The United Kingdom would lose the advantages of the EU’s state-of-the-art technologies.
The EU grants these to its members in environmental protection, research and
development, and energy.
 Also, U.K. companies could lose the ability to bid on public contracts in any EU country.
These are open to bidders from any member country. The most significant loss to London
is in services, especially banking. Practitioners would lose the ability to operate in all
member countries. A hard Brexit could raise the cost of airfares, the internet, and even
phone services.
 A hard Brexit would hurt Britain's younger workers. Germany is projected to have a labor
shortage of 2 million workers by 2030. Those jobs will no longer be as readily available to
the U.K.'s workers after Brexit.
 London has already lost many nurses and other health care professionals. In the year
following the referendum, almost 10,000 of them quit. The number of nurses from Europe
registering to practice in Britain has dropped by almost 90%.
 Under a hard Brexit, the U.K. could lose Scotland. It could join the EU on its own, as some
countries within the kingdom of Denmark have. It may even have a referendum to leave
the United Kingdom.

Brexit pushes UK business expectations to the weakest: CBI (reference- economic times)

The Confederation of British Industry's (CBI) gauge of private sector activity held steady at -6% in the
three months to September, the same as in the period to August.
Pessimism in British businesses rose in the three months to September to the highest level in almost
eight years, as the escalating Brexit crisis weighed heavily on companies, a survey showed on Sunday.
The Confederation of British Industry's (CBI) gauge of private sector activity held steady at -6% in the
three months to September, the same as in the period to August.
But business expectations for the coming three months dropped to their lowest since December
2011, across the survey of 576 countries.

5
 BIBLIOGRAPHY

 Wikipedia.
 https://ukandeu.ac.uk/fact-figures/what-is-hard-brexit/
 Economic times:
https://economictimes.indiatimes.com/news/international/business/brexit-crisis-pushes-
uk-business-expectations-to-weakest-since-2011-cbi/articleshow/71356315.cms
 https://www.cfr.org/backgrounder/what-brexit-means
 The BBC: https://www.bbc.co.uk/newsround/46607260
 https://www.rand.org/content/dam/rand/pubs/research_reports/RR2200/RR2200/RAND
_RR2200.pdf

6
7