6 ways Brexit impacts your wallet
Brexit is like a bad soap that is unfolding in real-time. The press has spilled a lot, and I mean a lot, of ink over this event ever since it started on 23 June 2016. Yep, it’s been that long.
And as things are unraveling for Boris Johnson the future of Britain remains. What is sure, is that a Brexit, no matter if there is a deal or not, will have a huge impact on the lives of millions of Brits and Europeans.
If the new Prime Minister of the UK has his way, the Brexit is happening in October, and how. It has become clear he has no qualms to leave with no deal with Europe. This no-deal Brexit even seems to be the most realistic at the time of writing.
While the news has said and written a lot about whether a deal can or will be reached, it’s not always clear what a Brexit might imply and in fact, already implies.
What kind of impact does the Brexit have on your wallet? Here are 6 things you might and maybe already have noticed.
A small disclaimer though, since nothing is official yet, things can still change. If they do, I will update this post accordingly.
Brexit impact on your wallet
Cheap Pound
The Pound dropped considerably. Not only compared to the Euro but also compared to the Dollar. This makes the UK a nice holiday destination for Europeans. The Pound recovered in the past but with the current uncertainty, it’s very unlikely that The Pound will resurge soon.
A hard, or soft, Brexit can cost you your job
I admit, this one is harsh but unfortunately a harsh reality, especially in case of a no-Brexit deal (Vandenbussche, 2019). This harsh reality goes both ways, unfortunately. How bad the impact could depend on the type of Brexit we get. The worst is, as you can imagine, when a no-deal or hard Brexit happens.
If it comes to a hard-Brexit The textile and food industry will see the biggest impact. In these two sectors alone, over 242 000 jobs would be lost for Europe as a whole. Across the board, the country with the most to lose is Ireland relative to its size.
In most sectors, mu own country, Belgium, is amongst the top three to four EU-27 countries most negatively affected by Brexit. This remains for both a soft and hard Brexit scenario. Especially in the Retail sector, Belgium ranks first in Europe with over 2400 jobs lost in case of hard Brexit.
For the UK 1.2% of GDP and around 140 000 jobs would be lost when a soft Brexit happens. In case of a hard Brexit, the UK could lose 4,4% of its GDP and around 526 000 jobs.
Hard brexit job loss
Hard Brexit output loss
No more EHIC, so Health insurance can become more expensive for Brits
The European Health Insurance Card or EHIC is a free card that gives you access to medically necessary, state-provided healthcare during a temporary stay in any of the 28 EU countries, Iceland, Liechtenstein, Norway and Switzerland, under the same conditions and at the same cost (free in some countries) as people insured in that country.
Since Brits won’t be able to make use of the EHIC, they might have to check their health insurance and get additional coverage, that can cost them more. Especially for those with pre-existing medical conditions and routine maternity care and emergency care.
Individuals with chronic illnesses, for example, those who require daily dialysis, can travel knowing they will receive treatment on the same terms as the citizens of the country they are visiting (Reality Check Team, 2019).
Higher fees for paying with credit card
For the Brits the fun doesn’t end. If there’s no deal, you may be charged more for using credit or debit cards to pay for things in euros when you buy from companies in the EU, Iceland, Liechtenstein or Norway.
Imported goods from Britain into EU and vice versa may get more expensive
As part of the European free trade area, there are no tariffs on imported goods from Britain into the European Union and neither are there any the other way around. As a member of the EU, UK firms don’t have to pay extra duties, taxes or have customs checks on goods travelling to or from the EU.
Top 10 trade countries (£ billion)
This will of course change when a no-deal Brexit happens. In case of a Brexit with a deal it’s possible that there is a new trade agreement.
What goods are we talking about? Well, cars apparently. According to the most recent Briefing paper by Matthew Ward of the House of Commerce:
In 2018, road vehicles were the UK’s single largest import from the EU,
valued at £47 billion, 17% of all UK goods imports from the EU and
43% of all UK imports of road vehicles.
The second good, medicine, follows at a distance with 6.7% of the total imported goods.
Roaming will be a thing again, and it'll cost you
Using your mobile in the EU may be more expensive in the result of a no-deal Brexit. The amounts EU mobile operators would be able to charge UK operators for providing roaming services would no longer be regulated after Brexit.
For Europeans, who will want to visit the UK that might become cheaper to travel to, will have to be careful about using their data plan as European providers might start charging hefty sums for data usage.
Brrrrrexit
There you have it. 6 very good reasons why the Brexit isn’t going to be amazing for your wallet. Now, once again, this is based on a number of assumptions such as a no-deal Brexit or a Brexit with a deal. And like always with assumptions, they can be wrong. Eventhough quite some research is done into the impact it remains unclear what the real impact will be.
Though whatever it’ll be, the deadline, for now at least, is in:
Have you been following the Brexit news as of late or are you ignoring it to keep a good night’s rest?
Please share your thoughts about the latest Brexit developments in the comment section.
Sources:
- Vandenbussche, H. KU Leuven (2019, June). Sector-Level Analysis of the Impact of Brexit on the EU-28. Retrieved from https://www.fdfa.be/sites/default/files/atoms/files/Brexit%20impact%20study%202019.pdf
- The Visual Journalism Team (2019, August 1). No-deal Brexit: 10 ways it could affect you. Retrieved from https://www.bbc.com/news/uk-politics-47470864
- British Government (2019). Buying things from Europe after Brexit. Retrieved from https://www.gov.uk/buying-europe-brexit
- Reality Check Team. BBC (2019, September 3). Will the EHIC be valid after Brexit?. Retrieved from https://www.bbc.com/news/world-europe-44850972
- Ward, M. House of Commerce (2019). Statistics on UK-EU trade (CBP-7851). London: U.K. Retrieved from https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7851#fullreport