A Brexit Vote Gone Awry: The Spread Betting Perspective
Brexit Vote Highlights Sharp Divide Between Young & Old in the UK
The Brexit referendum on Thursday June 23, 2016 was historic in every way. The UK, once a stalwart member of the 28-nation bloc has now voted overwhelmingly in favour of breaking from the EU. As can be seen from the above graphic, the 18-24 age group voted 75% to remain in the EU, while the 65+ age group voted by a margin of 61% to 39% to break from the EU. This sharp contrast highlights the divergent opinions shared by different demographics in the UK.
Now that the vote has been decided and Britain is going to move ahead with a Brexit, all manner of complications have bubbled to the surface. For starters, Prime Minister David Cameron announced his resignation and will be stepping down in October 2016. He has refused to juggle the hot potato Brexit issue and instead deferred to his successor. There are several contenders in the running including the former London Mayor Boris Johnson. Johnson is not the preferred candidate for the Tory party, and he will face strong opposition from within the political establishment.
Prime Minister Cameron is not bound by the outcome of the Brexit vote. It is merely an advisory notice given to the leadership. That the overwhelming number of politicians in the UK have accepted the public’s decision to break from the European Union is an entirely separate issue. There are problems ahead for whoever invokes Article 50 of the Lisbon Treaty. This important legislative edict puts into play the process of divorce of the UK from the EU. It is a lengthy process which can take upwards of 2 years to complete. The complex disentanglement is wrought with difficulties on every level, not least of which are the free-trade agreements currently in place between Britain and the European Union.
Has Johnson Drank from the Poisoned Chalice?
While Boris Johnson may well have been championing Britain’s departure from the EU, he will not want to be juggling the issues if he runs for office at 10 Downing Street. For starters, the ramifications of committing to a Brexit are staggering. Johnson, or the next Prime Minister pushing forward to implement a Brexit will have to do deal with the following issues:
• The economic, political, social and unknown consequences related to a Brexit
• The possibility that Scotland and Ireland will push for independence from the United Kingdom
• The domino effect of other countries wanting to push for independence from the European Union such as Greece, Italy, Spain, Portugal etcetera
• Broken trade agreements between Britain and the EU will become the poisoned chalice that the next Prime Minister will have to bear
• A sharply depreciating GBP (already happening), a looming recession, falling personal disposable incomes, and job losses across the board
Many Challenges Ahead for EU and UK Financial Companies
These are but a handful of the many real challenges ahead for Britain, the European Union and the global economy. Spread betting companies are also juggling their own futures by way of licensing and registration in the European Union under authorities such as CySEC (Cyprus Securities Exchange Commission) and in the UK by the FCA (Financial Conduct Authority). In other words, financial enterprises licensed in Europe may have to seek exclusive licensing in the United Kingdom in order to operate and vice versa. For now, uncertainty abounds and the only clarity is that things will invariably get worse before they get better.
About Brett Chatz
Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise in online trading for spreadbettingreview.co.uk.