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Economics trading with theEU (44% of UK exports goods and services went to…
Economics trading with theEU
44% of UK exports goods and services went to the EU
This share has been decreasing
EU commission estimates that in the next 10-15 years 90% of world demand shall be generated outside of Europe.
Imports from the EU have remained flat @ 53% over the last 16 years (static business)
exports to the EU were £220 Billion (2015)
The UK imported £290 Billion from the EU
Sold £134B of goods to the EU, they sold the UK £223B leaving a deficit of -£89B
Sold £89B of services to the EU, the UK bought less services leaving a service surplus of £21B
If Britain does not negotiate a trade deal we will incur tariffs on export of our goods and services
80% of the UK overall trade comes from services (financial consulting )
Triggering article 50
Look beyond the knee wretch reaction
The exchange rate will fall as this movement drives uncertainty, however it encourages increased exports as trading with the UK becomes cheaper.
On a global scale
Should the value of sterling fall, this makes us much more attractive to trade with. Following the rules of demand
As a price goes down demand increases (Ceteris paribus)
Short term shocks of leaving the EU
shock equal to 50% of the GFC (2008) Global financial crisis
Predicted 6% cut of GDP