Uncertainty Abounds After U.K. Elects Brexit by Adam Putz, PitchBook
The U.K. has voted to leave the EU. The turnout for the EU referendum topped 72% of registered voters and split the electorate nearly in half.
The U.K. is itself a European union, bringing “together” Great Britain and Northern Ireland. That union voted to leave the EU, exposing deep economic, geographic and social divisions within the U.K. that will structure how it emerges from the recession to come.
Northern Ireland and Scotland voted for the U.K. to remain an EU nation. England and Wales voted to leave. These results reflect centuries of marginalization for many from the larger U.K. project. Those from the geographic periphery perhaps saw an unprecedented extension of economic and political opportunity represented by the EU over and against the U.K. Those isolated from the economic center of the U.K. perhaps saw the threat of onerous regulation or encroaching competition for labor and markets from other EU member states.
In the coming weeks, the foundations of British unity will come under increased scrutiny. And, in the coming weeks, the foundations of European unity will also come under increased scrutiny. Leaders worldwide will begin the process of integrating the fifth largest economy into a world order it voted to disrupt.
For now, the pound sits at historic lows against the dollar. The euro has also dropped to historic lows. The cost of crude oil has dipped. And the value of gold has increased. As the central banks of England and Europe debate fiscal policy and as markets challenge the best of contingency plans, it’s tough to predict precisely what to expect. The U.K. now has two years to negotiate deals with the 27 nations that represent roughly half of its annual trade.
None of them appears particularly keen on this result.