What the Brexit Will Mean For You!

As the dust fails to settle, the shock still set and article 50 yet to be invoked, the world is now focused on divided isle to see exactly what the Brexit will mean for the Great British public.

Now we know the Armageddon has befallen the UK so far, despite many on the #Remain campaign telling us so, the Brits step bravely (there’s a fine line between bravery and foolishness) into the unknown with no precedent to refer too. It came as a shock that the Leave campaign prevailed by a 52-48% margin. At one point the Bookmakers were offering odds of 1/8 on Remain winning and 11/2 on a Leave victory. Now with shell-shock still ringing in the ears, lets have a closer look at what the Brexit will mean.

Holidays

The British Pound plummeted against all currencies, but picked up a bit towards the end of the day. The GBP/USD crashed more than 10% to a 31-year low. By the time the closing bell rung on a day not to be forgotten, the pared losses a little to close at 1.3683, down 8.03%. Meanwhile, the GBP/EUR closed 5.8600 lower at 1.2300.

What this means to you, is that your holidays and shopping trips to New York, Ibiza, Florida and Paris just became a lot more expensive. In the US, a family who last year spent £500 whilst on holiday will now need to find another £65 more. So those dodgy ‘Goochi’ glasses bought at a stall in Fuengirola market well set you back another half euro.

With regards to freedom of movement, Britons will most likely be able to enjoy visa-free travel to EU countries for the near future. However, Brits should be prepared to switch to the “All other passports” lane when once the divorce papers are agreed.

The Union

Despite a successful No vote in the recent Scottish Independence vote, a period of internal turmoil lays ahead for the United Kingdom. Scottish leader Nicola Sturgeon said that her government will start getting ready legislation for a new referendum on Scotland’s independence after most Scots voted to stay in the EU. Best out of three it seems for the SNP.

Meanwhile, Northern Ireland’s deputy leader Martin McGuinness, from Sinn Fein , demanded a referendum on a united Ireland after the vote after Northern Ireland voted to stay in the EU too. We even had the bizarre situation where Ian Paisley Jr tweeted recommendations for Northern Ireland residents to take a second passport (Irish) if they could.

Over in Wales, they voted out. Let’s see off those large EU subsidies to regenerate ex-mining communities gets replaced eh.

Trade

Currently for every 6 pound we export to Europe, we import 10 pound back. Britain is the 5th largest economy in the world, after the US. China, Japan and Germany. It represents 18% of the total GDP of the 28 member, soon to be 27 member European Union. The fact of the matter is, the UK will still want to trade with Europe and Europe will still want to trade with the UK.

New agreements will need to be made with all its traders and new ones too. The UK can import radishes from Africa, at a far lower cost than even in Poland. Who knows, the UK can now even take this opportunity to become self sufficient in radishes. Hooray, radishes for everyone!

Jobs

Within hours of the result a tweet was doing the rounds that Morgan Stanley began the process of moving 2000 staff to his Frankfurt office. Although quickly denied by Morgan Stanley, there is a concern that jobs will be moved as a result of the Brexit.

To know what is going to happen, we have to see what agreements are made, what labour laws are invoked and the implications upon the UK tax system. Jobs may well be moved in the interim, but not in any great numbers.

It may well be the case that the UK will become less of an attractive option for economic migrants. However, unemployment is around 5% in the UK, approximately half the EU average, so even with companies relocating, the books should balance themselves out as far as jobs are concerned.

Immigration

Points system like Australia? Who knows? Next.

Housing Market

With a downturn predicted as an “evitable result of the Brexit”, interest rates look as though they could be lowered as low as zero to boost the economy. UK house prices have been predicted to decline by 15%, with transaction volumes down by 20%. KPMG are predicting an overall 5% drop in prices across the UK. Now, this should attract foreign investment, but there a housing shortage getting larger and larger each year.

Will zero rate interest boost the market? yes, but not enough to prevent a decline. Looking to buy now? wait.

Profiting From Brexit

The massive fluctuations in the market on Friday were an anomaly. We won’t see days like that again for a long time. Money was made and money was lost on Friday. One forex education provider reportedly made one of its VIP clients $200k in a single day through its binary options signals service.

Gold closed 4.39% higher as investors sought a safe haven amongst the Friday madness. Expect the steady yield of gold, silver and Bonds to continue to find favour. This despite expected interest rate rises in the US.

Currency traders can expect a roller-coaster ride ahead, as with oil traders. But then again, whenever is it the children’s teacup ride at the amusement park that is the financial markets. Only less amusing and the raiser of more heart rates than any ride an amusement park can offer.

If you want to profit from Brext. Get into Gold and Silver. The roller-coaster passengers have only really had their first white knuckle moment. Unless you have a heart as strong as EU President Jean-Claude Junckers will not to reform, stay safe and steady in precious metals.

Conclusion (So Far)

So what the Brexit will mean for the Great British Public and the financial markets overall really is yet to be seen. What we do know is that this is the most divisive vote in the UK since Gareth Gates and Will Young in Pop Idol back in 2002.

With months, even years of negotiations ahead and with a new prime minister to look forward to (Boris? really?), this was a leap into the dark. Done without a single box of matches, let alone a torch to illuminate the way. As the European Union project teeters on the brink, mumbles of referendums from other nations are becoming louder. We are already hearing audible murmurs from France, Holland, Sweden and Poland.

History is unfolding in front of our eyes. Only time will tell so enjoy the ride you chose to jump on.