Regardless of whether you voted for Brexit or Remain, we can all agree on one thing: the British government lied to us, and it has backfired significantly. In the classic politician style, this economic disaster has been swept under the rug despite it having nightmarish financial realities for the future of Britain. Confused? Let’s simplify things with these 18 concerning financial realities of living in post-Brexit Britain.
Currency Fluctuations
Ever since the Brexit bill was passed, NIESR reports that the British pound has never quite recovered, and it still suffers from immense volatility many years later. This instability means everyday purchases, especially imported goods, can vary in price frequently. The cost of living has become less predictable, with sudden spikes in the prices of groceries, electronics, and other essentials being all too common.
Rising Import Costs
Before Brexit, Britain was fantastic for its seemingly limitless range of foreign goods, and you could purchase just about anything, from French cheese to Latvian sausage, with ease. Unfortunately, post-Brexit tariffs have completely ruined this, increasing the cost of importing goods. Like many economic hardships in life, this may not be a big deal to large-scale supermarkets, but it’s the small European shops in the UK that are suffering.
Altered Travel Expenses
Anyone who has traveled to and from Europe over the last few years has experienced how expensive and complicated logistics have now become since Brexit. Airfares have increased due to additional taxes and fees, while accommodation and car rental prices have also surged. Furthermore, British travelers now face more restrictions and costs, which is ironic considering Brexit was supposed to “Take back control.”
Supply Chain Disruptions
Even regularly imported products such as energy and grains have faced serious supply chain issues in the face of Brexit. When paired with other significant world events and wars, this has led to horrendous shortages and delays, something that the rest of Europe simply doesn’t have to deal with, or at least not on this scale.
Job Market Uncertainty
Another financial reality of living in a post-Brexit Britain is how badly the job market is falling apart. It’s ironic, because Brexiters claimed that leaving the EU would give jobs back to Brits instead of migrants. However, the reality is that while many migrant workers have indeed lost their jobs, a lot of Brits simply don’t have the education or skills to fill these roles to a high-standard.
Housing Market Shifts
While the British housing market has always been volatile, the post-Brexit volatility has been something else. Some regions have experienced a decline in property values, while others see a rise due to internal migration. Either way, uncertainty in the economy has made potential buyers far more cautious, leading to slower market activity and affecting both homeowners and renters across the country.
Food Prices on the Rise
As we mentioned earlier, most things have become more expensive as a result of Brexit, but grocery bills have been affected particularly badly. Perhaps unsurprisingly, this is a result of higher import costs and supply chain issues, and therefore, products that were once staple items in British households have now become unaffordable or, in some cases, completely unobtainable.
Increased Trade Barriers
Brits haven’t quite seen the negative consequences of post-Brexit trade barriers just yet, but economists predict that they will soon become evident. Exporting goods is becoming complicated, expensive, and full of red tape, leaving businesses dealing with cross-border trade deals to adjust or even abandon their operations. Unfortunately, this doesn’t look good for foreign trade and product availability in the UK.
Financial Services Relocation
Perhaps unsurprisingly, several financial services firms have moved operations out of the UK to maintain access to the lucrative EU market. This relocation has had a ripple effect on the economy, resulting in countless job losses and concerningly reduced tax revenue. The shift has also impacted the availability and cost of financial products and services within the UK, which really doesn’t look good for the future.
Consumer Confidence Decline
As a result of the rising costs of living in post-Brexit Britain, consumer confidence has taken a significant hit. People are spending far more cautiously, focusing on securing the essentials rather than splashing out on luxury items. Sadly, this is something the UK hasn’t had to deal with since the ‘60s, so economists and citizens alike are understandably concerned.
Education Costs Abroad
Ask any young person, and they’ll express their disdain over how the cost of studying in Europe has now skyrocketed. With the loss of EU membership, UK students now face absurd tuition fees and fewer financial aid options when attending European universities, if they are allowed to study abroad at all. Tragically, this has also destroyed cultural exchange initiatives at universities and schools, such as Erasmus+ and French or German exchange programs.
Small Business Struggles
Another harsh financial reality of living in post-Brexit Britain is how small businesses have ultimately faced the most challenges of all. For enormous chains such as McDonalds and Wetherspoons, post-Brexit challenges have been bad for business, albeit manageable. Sadly, the same cannot be said for independent businesses that have far lower tolerances for risk, which has unfortunately led to the downfall of many of our most cherished local shops.
Export Challenges
Just like with importing EU goods into the UK, exporting British produce to the EU has become a complete nightmare. Red tape such as regulations, paperwork, and additional charges have made it completely unprofitable, and therefore, many businesses that rely on European markets have shut down. Unfortunately, this was something that those who voted to leave the EU never anticipated, despite constant warnings from economists and market analysts.
Public Sector Funding
Believe it or not, Brexit has even had an impact on public sector funding, with certain areas experiencing cuts or a redistribution of resources. This shift has affected services such as healthcare, education, and local government, with communities feeling the pinch as they face reduced access to vital services and support systems.
Changing Investment Patterns
It shouldn’t be too shocking to learn that the investment patterns of foreign firms have changed, with superpowers such as the U.S., China, and, of course, the EU pulling out of the UK due to uncertainty. This has affected the availability of capital for businesses and contributed to a slower pace of economic growth, the effects of which are slowly becoming very clear.
Shifts in Consumer Behavior
We touched on how consumers have become smaller spenders in the face of Brexit’s cost-of-living effects, but this has led to other noticeable shifts in consumer behavior. Brits are becoming more conscious of where products come from and are increasingly supporting local businesses. This trend is partly driven by higher import costs and a desire to support the domestic economy, which has altered the dynamics of the retail market.
Taxation Adjustments
There have been some significant adjustments in taxation policies following Brexit, primarily in relation to VAT, duties, and other taxes affecting individuals and businesses. These adjustments have led to varying impacts on different sectors, with some experiencing increased costs. Individuals also feel the effects on their personal finances, particularly when purchasing imported goods.