Britain recently voted to leave the European Union (E.U.) 52% to 48%, causing conservative Prime Minister David Cameron to step down and the international economy to shift. There are currently 28 members of the E.U.
Jack Van Dam, a senior political science major, studied the E.U. Referendum in the United Kingdom (U.K.) during the vote. He has followed British politics for a majority of his college career.
“The result of the Brexit has already started to create a period of economic uncertainty during a time where the global economy is starting to slowly recover from the Great Recession,” Van Dam said. “Since the Referendum, the U.K. has lost its AAA credit rating, the pound has hit a 31-year low, Britain’s stock market has lost £100 billion and large banks in the U.K. have lost roughly one-third of their stock value.”
London has historically been regarded as the economic hub of Europe. With the passing of the Referendum, London’s place in the economy could suddenly shift.
There are other financial centers around the world that United States financial institutions could choose to relocate to.
“U.S. banks such as JP Morgan Chase, Citi, Goldman Sachs, Bank of America and Morgan Stanley have large operations in London, and many jobs may be at risk to relocate to other financial centers in Europe…” Van Dam said. “JP Morgan has warned that 4,000 jobs may be at risk since the U.K. has voted to leave the E.U.”
A report by NBC News says that “the vote served as an indictment of Britain’s government and a barometer of domestic fears about immigration and the economy.”
The supporters of the British Exit, commonly referred to as Brexit, favored leaving the E.U. They claimed the U.K. should stand independent of the E.U. and find its own identity, both politically and economically.Their campaign was heavily centered on nationalistic ideals such as reforming immigration and refugee policy.
Those against a Brexit argued that it would cause a global economic and financial mess. The U.K. is the world’s fifth-largest economy.
Since the passing of the Referendum, nearly 4 million people have signed a petition for a second referendum. Many who voted for the Leave campaign have regretted their vote and are hoping for a redo.