By a vote of about 52% in favor to 48% against, the United Kingdom (UK) voted to leave the European Union (EU) on Thursday, June 23, 2016. Nicknamed “Brexit” as shorthand for Britain exiting the EU, this was an historic vote with potential consequences the world over. Here’s why and what it might mean for you.
Let’s back up a bit. The UK (England, Wales, Northern Ireland and Scotland) have been part of the EU since January 1, 1973. Formed after World War II, the EU has grown into a political and economic partnership between 28 nations that, among other things, lets goods and people pass freely between member nations as if they were all part of one country.
Several different arguments have been advanced in favor of and against Brexit. But in the end, it simply came down to whether a majority of those voting in the UK felt it was better for them to leave the EU or to stay. It’s unclear what leaving will mean, but in some way, there will be a new agreement between the EU and the UK as to trade, immigration and other aspects of the flow of people and goods between the UK and the rest of the EU.
Wait, didn’t Brexit already happen? Though the vote was definitive, it wasn’t legally binding. That means there are still concrete steps that will need to be taken to make Brexit official. While staying in the EU is still technically possible for the UK, it seems highly unlikely. To not move forward with Brexit would mean ignoring a clear result from an official, nation-wide vote.
Once the UK government invokes a legal mechanism known as the Lisbon Treaty, the country has 2 years to exit the EU. So, while Brexit may drag on for several years, it is expected to happen.
Because “Brexit” involves a complicated series of steps involving potentially several different countries, economies, agreements and peoples, it’s hard to say what will specifically result from the vote and exactly who the winners and losers might be.
For the U.S., the consequences are similarly unclear. However, many analysts seem to predict some sort of negative political and economic fallout. At a minimum, Brexit makes Europe more divided than before — politically, economically and socially. Brexit also introduces some uncertainty as to how the U.S. would trade with the UK versus the EU, now that they would eventually become two separate trading partners.
It’s hard to say if, when and how the average American would feel any effects from Brexit. Positive, negative, or somewhere in between, changes from Brexit would eventually make their way to American shores. This is clear, since the globe is more interconnected and interdependent, in many ways, than it ever was.
The credit scores provided are based on the VantageScore® 3.0 model. Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.
Subscription price is $29.95 per month (plus tax where applicable).