The Impact of Brexit on Global Business and Economy

Brexit, the United Kingdom's departure from the European Union, has sent shockwaves throughout the global economy. The aftermath of this historic event has been marked by uncertainty, volatility, and a significant impact on global business and economy.

*Economic Impacts*

The UK's economy has been particularly hard hit, with the country's GDP growth slowing down significantly since the Brexit referendum in 2016. According to a report by Cambridge Econometrics, the UK economy is estimated to be £140 billion smaller due to Brexit, with London's economy alone shrinking by over £30 billion ¹. The average Briton is also estimated to be nearly £2,000 worse off due to Brexit.

*Trade Impacts*

Brexit has also led to significant changes in trade relationships between the UK and the EU. The UK's departure from the EU's single market and customs union has resulted in increased trade barriers, including customs checks, rules of origin requirements, and regulatory divergence. This has led to a decline in trade volumes, particularly in sectors such as manufacturing and food exports ².

*Investment Impacts*

Brexit has also had a significant impact on investment in the UK. Foreign direct investment (FDI) inflows into the UK have declined by 37% between 2016 and 2022, as multinational companies have relocated operations to the EU to preserve access to the single market ². This decline in investment has also led to a decline in productivity growth, which has persisted since the 2008 financial crisis.

*Global Impacts*

The impact of Brexit is not limited to the UK and the EU. The global economy has also been affected, particularly in terms of trade and investment. The decline in trade volumes between the UK and the EU has had a ripple effect on global trade, leading to increased uncertainty and volatility in global markets.

*Conclusion*

In conclusion, the impact of Brexit on global business and economy has been significant. The UK's economy has been hard hit, with declines in GDP growth, trade volumes, and investment. The global economy has also been affected, particularly in terms of trade and investment. As the UK and the EU continue to navigate the complexities of Brexit, it is essential to prioritize policies that promote economic growth, trade, and investment.

*References*

² NIESR, "Five Years On: The Economic Impact of Brexit"
³ VoxEU, "The impact of Brexit on the UK economy: Reviewing the evidence"
⁴ UK in a Changing Europe, "The economic impact of Brexit"
⁵ CEPR, "The economic impact of Brexit"
¹ Cambridge Econometrics, "The economic impact of Brexit on the UK economy"
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