Despite the widespread fear and foreboding, a few voices maintain that an independent UK will, with some work, be a long-term economic boon for the country—and the rest of the world.
We take a look at the “best-case” outcomes of Brexit, and how some industries have already benefitted from the financial effects of the vote.
British manufacturing could see a resurgence.
The pound has weakened significantly since Brexit news first broke. Deutsche bank has predicted that the pound will fall further, to $1.15 against the US dollar by the end of the year. And while a weaker pound will make imports more expensive, companies that export from the UK will see their products gain a competitive edge. That boost in desirability of UK goods could lead to a resurrection of materials production (such as steel), and a surge in demand for UK-built goods worldwide.
Deregulation could ramp up UK business.
A confluence of two Brexit impacts could mean a rise in local manufacturing for British companies. While many British firms benefit from free trade with the EU, analysts have argued that many smaller companies don’t actually engage in that trade—but are still subject to EU regulations, which can get costly. According to The Week, a study by think-tank Open Europe found that “the worst case ‘Brexit’ scenario is that the UK economy loses 2.2 percent of its total GDP by 2030… However, it says that GDP could rise by 1.6 percent if the UK was able to negotiate a free trade deal with Europe and pursued ‘very ambitious regulation’”.
There’s a chance Europe could strengthen without the UK.
Economist Andrew Lilico, in an interview with Vox, believes that the only way for the EU to fix its economic issues is to cut ties with the UK: “Lilico argues that the euro can only work well if the eurozone becomes a single integrated superstate. And he argues that the UK’s presence within the EU has become the most important obstacle to deeper European integration.” Lilico, along with other pro-Europe economists, stated that in order for the EU to flourish as one state, periphery countries must leave the union.
So, while many economists and politicians warn of long-term chaos, certain industries—especially those in the UK—stand to benefit from a weaker pound and a surge in domestic business efforts.