The Road to Brexit: Causes, Political Consequences, and Economic Implications (2016–2020)

Abstract

Brexit refers to the separation of the United Kingdom out of the European Union. This paper will discuss the major reasons why the United Kingdom decided to make this decision after nearly 40 years and will evaluate the short-term effects of the referendum of 2016-2020. The qualitative research based on secondary sources such as economic and policy reports of the government of the UK and international organization addresses how the issues of sovereignty, national identity, political divisions, economic policy uncertainties influenced the effects of the referendum. The report also indicates the economic implication that manifested in the form of currency devaluation, trade deficit, low foreign direct investment, labour market adjustments and strain on financial services sector. It describes the impact that the departure of the biggest contributor to its budget by the EU had on the relations of the UK and the EU. The uniqueness of this report lies in the fact that the attention of the reader is primarily devoted to the particular time frame of four years, which is characterized by regulatory disintegration and unpredictability within the most important sectors of the economy and frameworks of ruling. It has offered a solid ground to the policy analysts and researchers to perceive the short term impacts of this mega event in the history of United Kingdom.

Key Words:  Brexit, Transition Period, Immigration, Political Divisions, Currency Depreciation, Foreign Direct Investment, Labour Market, Financial Services Sector.