Brexit

Brexit or British Exit describes the United Kingdom’s decision to formally leave the European Union (EU) as originally determined via a June 23, 2016 referendum.

Since then, the ongoing debate over Brexit has had a strong influence on the country’s politics and currency, the British pound (GBP).

The immediate aftermath of the referendum saw an extraordinarily tight vote and unexpected result, which collectively drove the GBP to lows not seen in decades.

Originally following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019.

Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter.

His tenure has been met with controversy, having been complicated by the outbreak of Covid-19.

While the United Kingdom was predicted to leave the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal.

Brexit Leaving More Questions Than Answers

While the United Kingdom is in a transition period following its departure from the EU, the country is still engaged in ongoing negotiations with the European Union regarding its trading relationship and nature of its formal exit.

Terms of this trade agreement must be met by January 1st, 2021.

Given lapses and delays, the UK has floated a “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the British economy.

At the time of writing, the situation is still ongoing.

For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent.

The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe.