There has been endless discussion, much of it heated, around what the impact of Brexit will be on the UK.
How our exit from the EU will affect our global political influence, the fabric of society on our island and our economic prosperity into the future are questions no-one really knows.
There are many factors and variables still to play out, some of which are in our hands and some which are not, such as the EU’s negotiating position. Realistically, we will not know what the actual impact of Brexit will have on our lives for another decade.
However, in the year and something since the Brexit referendum delivered the shock narrow win for the ‘leave’ camp, there has already been some noticeable changes. What we all tend to take notice of first is changes to our day to day finances.
So how has Brexit had an influence on the pocket of the average Brit in the period since June 23rd 2016?
This week, we released this infographic detailing changes that have already happened in the wake of the Brexit referendum.
The Pound Dropped after the Brexit Vote
The first and most noticeable impact of the Brexit vote was on the value of the pound.
It dropped immediately after the results of the referendum came through and at one point was down 10% against other major international currencies, its lowest level since 1985.
This has hit us in the pocket in a number of ways:
- 10% of UK residents are now less likely to book a holiday in Europe.
- With 40% of our food imported and paid for in currencies one pound now buys less of, grocery prices have risen.
- Cocoa prices in the UK hit their highest level since 1977.
More positively, the FTSE 100 rose 16% as many of the companies that comprise it benefit from a weaker pound.
The FTSE 100 is mainly big international companies that generate much of their revenue in other currencies.
When these revenues are converted back into pounds they are worth more, improving the bottom line for companies. Exports are also more competitive when the pound is weaker.
Uncertainty Influencing Economy After Brexit
The uncertainty that has resulted from Brexit, with no-one really sure what is going to happen over the next several years has had a noticeable impact on the wider economy.
Business tends to hold back from long term investment in an environment of uncertainty but this also affects larger long term financial commitments that individuals make.
Consultancy CEB have produced data showing the number of job vacancies in the UK fell by 700,000 in the week after the Brexit vote.
The number of asking prices for homes for sale being cut jumped by 163% in the 12 days after the vote.
Growth in the UK’s service sector fell to a 5-month low in February 2017.
Brexit Impact on Financial Services and Products
The impact of Brexit on the wider economy has had a trickle-down effect on the conditions of mainstream finance products most Brits use.
The interest rates offered on cash savings appear to have been rising quickly since March 2017.
While the Bank of England’s base interest rate hasn’t yet been raised, with inflation rising due to a weaker pound there is expectations that it will likely be lifted slightly before the end of this year.
Mortgages are seeing an inverse direction of movement with the interest rates banks are working to being revised up.
HSBC stopped offering its cheapest ever mortgage last December, a two-year fixed rate of 0.99%. The bank also increased rates on other mortgage products.
How has Brexit affected you? Tell us in the comments.