Video Duration 25 minutes 00 seconds
From: Counting the Cost

Beyond Brexit: The consequences of Britain’s great exit

What lies ahead for the United Kingdom and global financial markets now that the reality of a Brexit is inevitable?

Britain voted ‘Leave’ last Thursday, opting to quit the 28-nation European Union in an historic move, ending its 43-year relationship with Europe. With results almost too close to call until the early hours of Friday morning, the decision to leave the EU is now preempted to have the biggest effect on the European – and in turn, global – financial system since the economic crisis of 2008.

It's very destabilising, and I really wish that the prime minister had never called this referendum; and I also wish that economists had behaved a little more sensibly ...

by Ann Pettifor, Director of Policy Research Macroeconomics; City University, London

As and when Article 50 is activated – once Britain ‘officially’ notifies the European Union of its departure – a two-year separation process is set into motion, resulting in the final split.

This is the first time that any nation has decided to leave the bloc, and questions about other countries participating in similar referendums have already been posed. 

But what does the Leave campaign’s victory actually mean for the global market? How will the UK reform itself, especially in light of Scotland’s likely call for independence? 

Only one thing is certain: Uncertainty is rife and the overnight plummeting of the British pound to a 31-year low has already seen a frantic day of trading resulting in bank stock crashes across the kingdom.

However, remedial action has been triggered to counteract the immediate negative effects of the referendum result. This includes the Bank of England and the Central European Bank shoring up financial markets to prevent a recession, European leaders queueing up meetings to deter further splits from the EU, and the UK negotiating the new terms for free trade deals with over 50 countries.   

With Britain’s leadership also hanging in the balance and a likely spotlight on former London mayor and ‘Brexit’ campaigner Boris Johnson for the role of the nation’s new leader, where will the UK go from here? And will Great Britain be reduced to a solo England in the near future?

Over in Iceland, people are living the Leave voters’ dream – a relationship with the EU without the Stalin-esque imposition. With Icelanders free to deal business with whomever they choose, is this “frozen land of milk and honey” as perfect as the UK would like to believe?