Since the choice by voters to leave the European Union on June 23, 2016, the impact has been taking a toll locally in Great Britain as well as globally.
This can be seen as the British pound has hit a new low on international markets as of Monday 27th as fears of the British Exit (Brexit) from the EU are being realized. After the vote the Sterling (is the name of the British currency) is now at 132.13 cents, whereas, before the vote occurred the British pound was trading at $1.50 which shows the vote has dropped the value of the British dollar. Stocks in aspects such as metals, energy and bank stocks are the major causes in the drop in the Sterling. In the wake of this the finance minister of Britain, George Osbourne is looking to calm the worries of investors by stating that Great Britain has strategies in place.
As for the global market, U.S. banking and financial sector companies are preparing plans to change its European legal structures. Bank executives have stated, “While these changes are not certain, we have to be prepared to comply with new laws as we serve our clients around the world”. Financial services firms are willing to position themselves to soften the ‘blow’ and maintain operations in the UK as much as possible. However, the Brexit vote means UK-based financial services and other companies could lose their passporting rights (authorization to sell their products or services across the EU) which puts a strain on trade for US-based companies operating in the UK.
Uncertainty has struck fear into investors and businesses as all are worried of the outcome of the British vote to exit the European Union.