Brexit: Immediate risks

England chose to leave the EU with the vote results were 52% of agree compared to 48%
of not agree, after a referendum on Thursday 23th June, 2016 that immediate
consequences of a vote to leave the EU are already being felt. The value of the British
Pound is currently plummeting, stock markets are in freefall and no doubt a sizeable
outflow of capital is underway(VARDAKOULIAS, 2016).

Figure 1: Value of sterling against US dollar since 1971

According to

Value of sterling against US dollar since, the pound has collapsed to its lowest level in
over 30 years, suffering its biggest one-day fall in living memory(Business, 2016).In

addition, experts forecast the pound also fell 14-15% within a year(Bnews.vn, 2016),
pushing the UK to stand at risk of losing position the center of global finance and Dennis
de Jong - managing director of UFX.com said that "This is simply unprecedented, the
pound has fallen off a cliff and the FTSE is now following suit,". At the end of 24th June
2016, The FTSE 100's initial slump was its biggest one-day fall since the collapse of
Lehman Brothers in October 2008.

Figure 2: FTSE 100 fall as trading opens after Leave vote.

Proposed referendum on United Kingdom membership of the European Union will make
the UK lose a stable market of 500 million people in the EU, leading to a loss of 6%
General Domestic Product (GDP) in 2020, by more than half of UK exports is
destinations are the EU countries, contributions from 4% to 5% of GDP(Bnews.vn,
2016). Investors no longer interested in the UK market because of this country no longer

enjoy the benefits of the EU. Meanwhile, the UK need large amounts of foreign currency
to pay for import operations. This will be one of many reasons to push the British
economy into recession in the long term, according to the forecasts of many experts.
Not only weaken the economy, Brexit may also entail the risk that British society
becomes unstable. More than 2.2 million Britons are living and working in the EU
countries(VARDAKOULIAS, 2016) may fall into unemployment, and cut off all benefit
to preferential rights in society. A worse scenario is that countries such as Germany,
France, Spain ... also have the ability to separate from the EU after its supporters to leave
the EU in England won, thereby pushing the alliance to stand before the risk of
disintegration.
REFERENCE
Bnews.vn. (2016, June 24). Nhng h qu trc mt ca vic Anh ri EU. Retrieved from
Bnews.vn: http://bnews.vn/nhung-he-qua-truoc-mat-cua-viec-anh-roi-eu/18448.html
Business. (2016, June 24). Pound plunges after Leave vote. Retrieved from BBC:
http://www.bbc.com/news/business-36611512
VARDAKOULIAS, O. (2016, June 24). Brexit: the immediate risks. Retrieved from The NEF:
http://www.neweconomics.org/blog/entry/brexit-the-immediate-risks