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The Uneven Path Ahead
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The Uneven Path Ahead

The Effect of Brexit on Different Sectors in the UK Economy

Jiaqian Chen
IMF, 2018
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Editorial Rating

8

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  • Analytical
  • Overview
  • Hot Topic

Recommendation

The June 2016 UK vote to quit the European Union shocked the world and set into motion a series of events hurtling the country toward Brexit in March 2019. As the political leave-taking process grinds on, economist Jiaqian Chen takes a close look at the potential impact on the British economy and its industries. Because the EU and the United Kingdom have been linked economically and politically for decades, the unwinding of the partnership presents severe challenges for both parties. Executives and public officials will find this sobering report a valuable forecasting tool.

Summary

After March 2019, when Brexit finalizes, UK residents will get their first taste of life after the European Union. The economic ramifications for the country may be quite onerous, as the United Kingdom currently sends 44% of its exports to the EU. The European Single Market offered Britain a seamless trading bloc with 27 other member nations. Without a new trade compact, experts predict deleterious effects on industries across Britain’s economy. For example, the UK’s financial services firms perform roughly 25% of their work for EU clients, and the automotive industry sells 56% of its cars to EU buyers...

About the Author

Jiaqian Chen is an economist in the European department of the International Monetary Fund. 

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