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.
Why did the Brexit vote happen?
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.
How would Brexit happen?
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.
What might happen as a result of “Brexit?”
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.
Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.
What You Need to Know:
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.
*Subscription price is $24.95 per month (plus tax where applicable).