Brexit not yet fact, just more uncertainty!

 

   

    The brexit referendum came to a dramatical ending on the 23^rd of June with the brexit side winning 51,9 % to 48,1 %. This referendum resulted in a non-binding ruling from the British people to exit the European Union and the resignation of British prime minister David Cameron. This unforeseen result was met with a large negativity from the youth of Britain as they took to the streets in demonstration and petitioning for yet another referendum that has been signed by up to 3 million people. Article 50 of the Treaty of the European Union must be invoked in order for Great Britain to leave the EU which will start a 2-year process of leaving the union that won’t be taken lightly. Scotland already talking of vetoing the result and talking of entering the EU on its own and secluding itself from Britain.

What will happen henceforth is unknown but the effects of instability have negatively affected financial markets resulting in a loss of 2 trillion USD and the title of the worst day loss in history. Surprisingly the Footsie 100 was the least negatively affected market worldwide preceding the referendum. This is largely due to a large number of British companies positively affected of a falling sterling, such as large exporter British-American Tobacco who gained 2,56 %. Other markets that day all went downwards, the Dow Jones down 3,39 %, Nasdaq down 4,12 % and the DAX down 6,82 %. OMX Stockholm being closed on the 24^th did not initially feel the downfall but awaiting the open on Monday 27^th is waiting for a fall.

This referendum is not a fact yet. A lot has to be put in place and the transition of a British exit from the EU will not go smoothly with the Scots already stating that they will veto the result. All that said, Brexit is creating instability in the financial markets which will create greater volatility and negatively affect all countries. The saddening part of the story is the Brexit vote was largely driven by the immigration question but a Brexit will most likely not result in a large change in British immigration reform. London mayor, Boris Johnson is the likely predecessor of David Cameron and a large advocate of Brexit. The result of all these changes is going to be clear in the upcoming months and the only hope is that the EU will still have an amicable relationship with the British government as this will positively affect everyone. For EU the Brexit is a large financial blow but politically can be seen as a victory as the EU will gain more power over its remaining member states. This due to Britain being since its entry in the EU a large adversary to the EU gaining power.