In the wake of Britain’s shock vote to leave the European Union last week, international markets were plunged into turmoil. Investors scrambled to invest their assets in safe-havens such as gold and silver while sterling nosedived 11 percent. While the long term economic consequences of the Brexit are currently unclear, those in Britain who voted remain are already fretting about their financial future. According to a recent YouGov poll, 8 out of every 10 people in the UK who voted Remain feel Britain’s financial situation is set to get worse over the next 12 months. 56 percent of Remain voters also expect their household’s financial situation to worsen.
Thus far, many Leave voters aren’t experiencing the Brexit blues. The Leave camp is far more optimistic about the country’s fiscal future with 32 percent of respondents expecting the situation to improve over the course of the next 12 months. 34 percent expect things to remain the same with 27 percent feeling things will worsen. In terms of the vote’s impact on individual households, Brexiteers mostly feel their situation will remain unchanged from a financial perspective. (see chart down below)
UK: A Divided Nation
And so the people spoke. As the results trickled in during the night it gradually became clear that the UK was heading towards Brexit. Flying in the face of the majority of experts and academics, the public chose to leave the European Union. To be precise – 51.9 percent chose to leave.
For the other 48.1 percent and indeed the rest of the world, the shock is still resonating. No one, on either side, knows what is going to happen – economically, politically or socially. Prime Minister Cameron has resigned, the pound has fallen to the lowest level for over 30 years, and an initial 120 billion pounds has been wiped off the FTSE 100.
The close nature of the result highlights a stark split in the will of the population, not just from person to person but, perhaps more significantly, from country to country. Not a single area in Scotland voted to leave the EU with a total of 62 percent voting against the proposed Brexit. This has inevitably led to calls for a second referendum on Scottish independence. Having narrowly voted against independence from the UK in 2014, the First Minister of Scotland, Nicola Sturgeon, has said another vote is ‘highly likely’.
Today’s result might not just pull the United Kingdom out of the European Union, it may well end up tearing this divided nation apart.
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