How Brexit Screwed the World

August 10 by Stephanie Tan

You may know all the jokes and memes about Brexit. But do you know about the ripple effects it caused?

It was easy to assume before the vote that the outcome would only really affect people living within Britain. But nope, it had huge repercussions abroad as well. The Brexit vote sent shockwaves through the world, roiling stock markets and even decimating some people’s fortunes.

The worst thing is, most of the world hadn’t even seen this coming.

How did the sh*t hit the fan?

British citizens were asked to vote on a single question: “Should the United Kingdom remain a member of the European Union (EU) or leave?”

It’s worth noting referendums are extremely rare. As of 2017, there have been only 3 held in the U.K.

So why was then such a momentous decision left in the hands of the people?

Cameron’s high-stakes gamble

As far back as the 70s, certain quarters of Britain had longed to break free from the shackles of Europe. (Long before the EU even existed.)

Then in 2013, then-Prime Minister David Cameron pledged to let Britons “have their say” on Europe if his Conservative Party won the next general election. Although he was pro-EU, it was a political move to cement his power. To do that, he had to shut up the Eurosceptic politicians challenging him once and for all.

So Cameron kept his campaign promise and on June 23, 2016, a referendum was held. At the time he called the vote, he had probably expected an easy victory. But he belatedly realised he had overplayed his hand as the results came in: “Leave” won by 51.9% to 48.1%.

A few days after the results were announced, Cameron resigned. As it turns out, putting his d*ck in a pig’s head is not the stupidest thing he’s ever done.

 Why was Brexit such a shocker?

As we’ve also learnt from Trump’s victory, media and polls can get it wrong. Most polls and pundits in Britain had painted Brexit as a long shot. Even the betting markets – whose odds can often contradict polls – were off. One interesting theory posed in The Economist: the market was skewed by a small number of big bets by “Remain” voters, who tend to be wealthier than those who supported “Leave”.

How did Brexit screw everyone else?

Brexit panic caused global stock markets to lose about a whopping $2 trillion in value. Over £100 billion was wiped off the FTSE 100 in 2 days. The worst hit was the financial sector, as the share prices of banks with major operations in London were hammered. Meanwhile, the pound suffered its biggest drop ever in three decades.

While regular Britons braced themselves for belt-tightening and shrinking chocolate bars, the world’s richest also felt a pinch. The combined wealth of the planet’s most moneyed shrank by $127 billion in the first two days following Brexit.

Europe’s richest person, Armancio Ortega (owner of Zara’s parent company, Inditex) had $6 billion wiped from his fortune. Ripples were also felt across the pond, as Bill Gates and Amazon’s Jeff Bezos both lost a total of over $3 billion.

While the stock markets and sterling have recovered since then, a lot is still riding on the outcome of ongoing ‘divorce’ negotiations. With the UK scheduled to leave the EU in 2019, only time can tell how this will play out. Will it be business as usual…or will there be another sh*tstorm on the horizon?

 Actual quote from Nigel Farage: “If Brexit is a disaster…I’ll go and live somewhere else.”

Written by

Stephanie Tan

Nomadic wordsmith who has dabbled in public relations, media and now, casual trading. She may not have a head for numbers but she enjoys doing cyber-sleuthing on companies and loves being immersed in all things tech. Connect with her on BUX: @Stephtrades

Disclaimer: All views, opinions or analysis expressed in articles are that of the author and do not represent the views of BUX. Neither BUX nor the author provide financial advice and these articles should not be construed as such.

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