UK after Brexit

Setting off tremors

On Friday in a historic event citizens of United Kingdom voted to leave the European Union. Within hours of the verdict Prime Minister David Cameron, who supported staying in, announced his resignation. Well-known economists across the Atlantic had advised against exit with Thomas Piketty calling it political suicide and Joseph Stiglitz asking Britain to exercise the option only if EU signed the Transatlantic Trade and Investment Partnership (TTIP) with the US. It remains to be seen whether British citizens would be gainers or losers in days to come.

The Brexit set off economic tremors which were felt all over the world. The pound plunged against the dollar to levels not seen in more than thirty yearson fears that the decision will hit investment in the world’s fifth largest economy. The ‘historic divorce’ roiled Indian markets, too, with BSE Sensex trading 1,000 points down in the morning. The KSE-100 index fell two per cent in early trading on Friday. Brexit has raised questions over London’s role as a global financial capital

Other important questions relate to the future of the United Kingdom and its multicultural society. Scotland voted 62 pc in favour of staying in the EU and is likely to press for a new referendum on whether to become independent. Northern Ireland’s largest Irish nationalist party, Sinn Fein, said the result strengthened the case for a vote on whether to quit the United Kingdom. The propaganda that EU threatened sovereignty and allowed too many immigrants could give a new lease of life to the narrow nationalistic streak that had over the years been on the decline. The tragic murder of Jo Cox, a pro-EU Labour MP by a man shouting “Britain first” raised questions about whether the tone of the debate was fueling intolerance and hatred and threatening the British multicultural society.

Britain has been criticised for playing second fiddle to the US in global politics. There is a perception that with Brexit EU will be weaker while Britain could become even more dependent on the US than before.