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What is the effect of Brexit on the British economy?
Research indicates that Brexit will have profound consequences in various sectors of Britain's economy. Trade, labor access and subsidies play an essential role in Britain's agricultural sector. According to FT Reporters (par. 4), with Brexit, this sector will be affected by insufficient labor, as 90% of workers come from central and eastern Europe. Farmers also depended on the tariff access to agricultural inputs under EU. Two-thirds of the agricultural products are exported to the EU and thus will be interrupted and will have a negative impact on the economy.
The manufacturing sector, which contributes to 10% of Britain's economy according to Dhingra et al. (p.3), will also be affected. This sector depends on the EU’s negotiations on trade on how to sell their products. It also depends on global talent to improve its products, which was available through free flow of people under EU. With Brexit, the EU’s effect on determining their products’ effective cost and free flow of talents will be halted; consequently affecting the economy.
Services that account for four-fifths of Britain's economy will also be constrained by the barriers that will be impacted by Brexit (Begg & Mushövel, n.p.). This sector depends on staff mobility, transfer of clients and data across the borders, which were effective under EU. With Brexit, free-trade agreements will be ineffective. Affecting services will have a negative impact on Britain’s economy.
The financial services sector makes up for 7 percent of Britain's economy (FT Reporters, par. 13). After Brexit, this sector will lose significantly, as it will try to adjust from the single market rules. With free flow of people affected, the sector will also experience challenges in the labor force. Despite the prospect that it may stabilize after several years, this interruption will adversely affect Britain's economy.
The education sector is another area that will be affected. Britain’s universities generate approximately £11bn through export in a year and thus are expected to change after Brexit (FT Reporters, par. 15). They depend on funding from EU for research. EU also contributed to the sector’s labor force and international students. Following Brexit, these benefits under EU will be cut and thus the sector will be unable to sustain its contribution to the economy.
Begg, Iain, and Fabian Mushövel. "The economic impact of Brexit: jobs, growth and the public finances." (2016).
Dhingra, Swati, et al. "The consequences of Brexit for UK trade and living standards." (2016).
FT Reporters. “How Brexit will Affect Sectors of the UK Economy.” Financial Times, 23 June 2017, www.ft.com/content/602f3674-573a-11e7-9fed-c19e2700005f. Accessed on 8 Feb. 2018.
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