Premium Essay

The Case for a Possible Brexit and Its Impact on the Uk Economy

In: Business and Management

Submitted By glikek
Words 1599
Pages 7
The case for a possible Brexit and its impact on the UK economy is one that has been widely discussed over the years, given the significant economic effects it imposes on both parties involved. The UK taking up its membership into the EU in 1973 following its establishment in 1967 enabled vast benefits of free trade to be shared amongst members of this trading bloc. However, over a quarterly time series from 1999 to 2014 the UK has been noted to have run a relatively large balance of trade deficit in terms of its trade in goods with the EU (see figure 2), and as such lays emphasis on the UK’s lack of competitiveness, specifically in its manufacturing industry.

The importance of the EU has increasingly become more significant in terms of the UK’s total economic activity, generated through trade transactions.

Figure 1: ONS

As seen in figure 1, there has been a downward trend in the transaction with the EU expressed as a percentage of UK GDP, falling by 231.25% from Q1 of 1991 to Q4 of 2014.

In relations to the total trade in goods with the EU, there has generally been a deficit, which increased by 874.9% from 1999 to 2014. From figure 2 it can be observed that the largest deficit of -£21500m occurred in Q4 of 2014 and the lowest in Q4 of 1999. Figure 2: ONS

The persistent balance of trade deficit seemed to be a result of imports from the EU to the UK exceeding exports. This could be the case as the percentage increase in exports from transactions made by the UK to the EU was only 43.2%, whereas imports rising by 104.92% from 1999 to 2014 were substantially higher. In this instance, figure 2 may be closely interlinked with figure 1 in trying to explain the reason for a downward trend in the UK’s transaction with the EU expressed as a percentage of GDP. As UK imports exceed exports it implies that countries within the EU demand less of

Similar Documents

Premium Essay

Would a Brexit Benefit the British Economy?

...Would an exit from the EU benefit the British economy? Advocates of the UK leaving the EU claim that there would be little trouble negotiating a free trade agreement with the EU once it left, because the UK has a large trade deficit with the rest of the Union. If trade barriers between Britain and the remaining member-states were erected upon exit, the EU would lose more exports earnings from Britain than vice versa. At the same time, the UK would be freed from the burdens of EU regulation and hence able to boost trade with faster growing parts of the world, nations such as China, US and emerging markets that include India that are not part of Europe. This could be done by eliminating tariffs and signing trade agreements without the constraints of EU membership. Undermining this assertion is the belief that the UK is a big enough economy to be an effective trade negotiator in its own right. As a result it might be concluded that the UK would see little impact from leaving the EU except perhaps a minor reduction in trade while new arrangements were made. However, it would be ill judged to assume that the UK would be able to dictate terms with the EU simply because it is running a trade deficit. Primarily, the EU buys half of Britain's exports whereas the UK accounts for little over 10 per cent of exports from the rest of the EU, so the UK would be in a weak position to negotiate access on its terms. Furthermore, it could be argued that the UK's access to many non-EU markets comes...

Words: 4621 - Pages: 19

Premium Essay

2015-Annualreport-Jpmorganchase

...A N N U A L REPORT 2015 Financial Highlights As of or for the year ended December 31, (in millions, except per share, ratio data and headcount) Reported basis1 Total net revenue Total noninterest expense Pre-provision profit Provision for credit losses Net income Per common share data Net income per share: Basic Diluted Cash dividends declared Book value Tangible book value2 2015 $ $ $ Selected ratios Return on common equity Return on tangible common equity2 Common equity Tier 1 (“CET1”) capital ratio3 Tier 1 capital ratio3 Total capital ratio3 Selected balance sheet data (period-end) Loans Total assets Deposits Total stockholders’ equity Headcount 93,543 59,014 34,529 3,827 24,442 6.05 6.00 1.72 60.46 48.13 2014 $ $ $ 95,112 61,274 33,838 3,139 21,745 5.33 5.29 1.58 56.98 44.60 11% 13 11.6 13.3 14.7 $ 837,299 2,351,698 1,279,715 247,573 234,598 10% 13 10.2 11.4 12.7 $ 757,336 2,572,274 1,363,427 231,727 241,359 Note: 2014 has been revised to reflect the adoption of new accounting guidance related to debt issuance costs and investments in affordable housing projects. For additional information, see Accounting and Reporting Developments and Note 1 on pages 170 and 183, respectively. 1 Results are presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), except where otherwise noted. 2 Non-GAAP financial measure. For further discussion, see “Explanation and Reconciliation of the Firm’s Use Of Non-GAAP ...

Words: 207037 - Pages: 829