Abundant researches have been held to analyze the impact of Brexit from different perceptions. There are some researches which were focused mainly on the pattern analysis behind the voting. Particularly three factors were most influential for the outcome of the referendum and in ascending order those were the Sovereignty (17%), Immigration (20%) & Economy (21%) (Swales, 2016). These three factors were the major forces working behind the eventual occurrence. However, similar researches based on some in-depth attributes provided more concentrated relational factors. According to those researches,( e.g. Clarke, 2016; Goodwin and Heath, 2016; Carozzi, 2016) the voter disapprovals for the ‘Brexit’ were mostly interrupted due to the level of their immigration. The larger picture portrayed a scenario that the areas with a higher level of immigrants were mostly against the ‘Brexit’ but in contrary, the areas with a higher portion of recent migrants generated a higher rate of approvals for the incident (Portes, 2016). Some social studies added variation into these definite conclusions. As in the example, Kaufman (2016) came up with the conclusion that the social attitudes took greater and weighty influences on the voting patterns rather than the economic self-interest. Contrarily, Vasilopoul (2016) argued that utilitarian concerns regarding the cost and benefit of European integration more or less influenced the vote choice. All these studies so fur discusses the voting patterns of the key individuals. Also, a larger portion of studies has been conducted towards the discovery of key determining factors behind the generation of approvals regarding the Brexit among the voters. According to Arnorsson and Zoega (2016), the voters’ reflection is affected significantly by income and education. The income and education level had downward sloping with the decision of leaving of European Union. The higher the income and education among the voter were the more they wanted to remain in the EU. This also brings in the discussions that had been conveyed by Portes. Portes (2016) found that individual perception had a large contribution towards this drive among the voters. He found that the proportion of the residents who have not completed secondary school feel more threatened by increased immigration of less-skilled workers coming from the other member states, especially from Eastern Europe. The perceptions of the impact of migration were a key factor in driving the Leave vote (Portes,2016). The decision generated as an outbreak of survival instinct. The immigration was working as the most important factors among the voters. However, the graphs provided varying outcomes. Where the immigration is considered as a positive economic impact there was a rise in disapproval for the concerning incident but in contrary where the concept of immigration had a dire image, the voters’ decisions were more shifted towards the departure. To convey in plain terms, the individual perception was the revolving factor. Since these in-built perceptions were possessing influential impacts so gradually more researches were developed seeking the factors responsible for the determination of these perceptions. The dominant factors on the road to this correlation were mostly affected by the controlling of the socio-demographic factors (Ashcroft, 2016; Vasilopoulou, 2016).
There are researches based on through observation of the voting patterns. These researches and publications included some fascinating factors into the pot. One of these provided a specific demographic factor controlling or influencing stated pattern. The four strongly correlated factors were the GDP per capita, Proportion of people of the age above 65 years, the level of education & immigrants’ contribution among the population. The study presented the findings as the areas with proportionately high residents of the above 65 years of age, with low GDP per Capita were mostly supported the Brexit (Arnorsson and Zoega, 2016). Also in the same study it has been found that a high contribution of people with less educational levels and more contribution in immigration results in a shift towards the leaving verdict.
The financial and economic impact of Brexit never lost the interest of the researchers. So there were some eventual researches conveying the rational predictions of Brexit on these two stated fields. According to one study, the Brexit might get in the way of economic growth for UK from the short run perspective (Fichtner et al., 2016). The finding has been supported by several academic research. According to the Economic Outlook (2016), the economic growth line of UK would provide downward movement portraying a fluctuation of around one percentage, numerically from 2.3% to 1.3 % per annum which has been certified by another research providing a prediction of a declining trend of the pound sterling of approximately fifteen percent with the comparison of the pre-brexit timeline. However, when the jar is mostly filled with pessimistic prophecies still there are some researches shedding a light of hope. According to Armstrong and Portes (2016) the brexit may open a wider window of opportunities for UK. European Unions trade manners have created imaginary trade barriers for countries like Australia, New Zealand & China. Brexit might be a construction brick towards future trade agreements with these worthy regions. This also adds the fact that the Brexit would grant exceptional freedom in trade deals for the United Kingdom. Proper visualization and rational planning might make the Brexit outcome even positive.
The Brexit impact is working from the smaller units of the economy. It has brought disastrous changing pattern into the rate of consumption as well as retail industry. According to the Independent (2017), there is rising tension between the industries. The whole economy is been facing a temporary inflation so the price is getting for the raw materials. The suppliers are losing the bargaining power with the businesses since the business organizations have little interest to cut the profit margin. So the suppliers and end consumers are the most horrific sufferers. On the other side of the coin, the business sectors such retail industries are also facing a descending count on the potential consumers. The impact of the brexit is been working on a psychological level among the consumer which is visible in the consumer basket growth in recent times. There has been a significant decrease in the consumption basket due to the fear of volatile emerging future (KPMG, 2017). According to Martin Newman, CEO at Practicology, the fashion industries might be under the direct curse of the incident (KPMG, 2017). Due to the changing buying pattern of the consumers this industry would face uncertainty at utmost level. In the same article it the upcoming future of real estate has also been discussed as among the one at higher risk. The consumers possess a fragile, shivering confidence which has been aided with a high level of political uncertainty. Nothing seems more fatal for the retail industry than the combination of these two. The probable consequences would be the immense pressure for cost reduction. This might certainly take some of the businesses out of the economy due to being incapable of coping up with the current economy (KPMG, 2017). Not only in consumer level but also the industry would also face catastrophe in financial and investment practices (Independent, 2017). There would be a rise in the price of shares and stocks that would make the market unreachable for most of the traders. Thus the trading frequencies would face a decline in the financial sectors as well as the sectors stated above
2.3 Short run impacts: Short run impacts are already observable. The immediate impacts of Brexit are devaluation of currency, fall in capital inflow, and a downturn in the share price (Bank of England, 2016). Great Britain Pound fell by 8 percent against US Dollar on 24 June 2016. It also fell by more than 10 % against the Euro since the referendum. According to the Governor of The Bank of England, UK is facing a sharp downturn in the share market. The Stock prices of FTSE 100 fell immediately after vote but recovered lately. The stock price FTSE 250 felt a downward pressure which is still below the pre-Brexit level. The Bank of England shows a fall in foreign inflows of capital by almost 50% in the first quarter of 2016. Brexit is causing delay in spending and investment. If this continue than economy will slow down causing a wage cut and unemployment. The center for Economic Performance of LSE assumed that the GDP of UK will fall by 2.2% as a result of living EU (Dhingra et al., 2016). The devaluation of pound also makes import expensive. As UK imports most of the consumer goods and food items from EU the cost of living in UK will also rise. Initially FDI will fall because of the change in international relationship with EU. But if the trade terms are favorable then the loss can be recoup.
Both the long run and short run impacts will have a multi dimensional effect at the household level as Brexit will have definitely bring a change in individual’s real income, living standard, saving –investment decisions and so on. For example, according to Euromonitor International’s Income and Wealth Distribution Model, a disorderly Brexit will impact all income and wealth segments and the top division is expected to be the most adversely affected. The top income-wealth segment (adults with an annual disposable income over US$42,793 and wealth in access of US$347,002 in constant 2015 prices) is expected to shrink to 4.6 million people in 2020, from 4.9 million in 2015. By 2030, their number will reach 4.8 million (Euro monitor International, 2016). This will happen mainly as a result of a long-term ultra-low interest rate environment and weak currency. As a consequence of this retailers and consumer-focused businesses (e.g. real estate, restaurants, home goods and furniture retailers etc.) that specifically target the UK’s wealthy and high earning individuals will be adversely affected. So this will have a trickledown effect on other segments.
Devolution of pound will change their consumption pattern if more imported goods are in their consumption basket. Moreover, future related uncertainty will also make bring significant changes in their consumption and savings decision, especially to those who are EU immigrants. Furthermore, the growth of the housing prices are expected to slow down in the short to medium term, as property investors look to assess all the risks associated with an EU leaver. This may in turn favor the low and middle income households. Consumer spending in healthcare may change depending government’s decision in investing in the National Health Service. This may allow more money for discretionary spending. So households overall spending pattern and lifestyle will definitely change as a consequence of Brexit. Devolution of pound, restriction in immigration, shrink of service and financial sector, and the overall uncertainty about the future will have different impact on different heterogeneous groups of people.
Immigrants living in UK are totally heterogeneous, as there are different group of people in terms of income level, level of skill, professions and ethnicity or origin. Regarding Brexit their voting decision also was not uniform. Most unskilled group of people voted for Brexit as they fare of unemployment as a result of European immigrants and also because of the thought that they are losing government benefits. Contrarily, the high skilled labors working in the multinational corporate did the opposite thing. Their migration status also played a vital role in decision making. The EU passport holders and British passport holders acted differently. In UK, a large number of people emigrate from EU countries for better life. They are the most vulnerable group as there is still chance that they have to go back to EU or their own origin. The high skilled people voted against it as they think the job opportunity for them and for their next generation is higher in that case. Now all they are facing the immediate impacts of Brexit. High inflation, devaluation of pound, fall in FDI etc. is definitely affecting their cost and standard of living. As there are number of imported items on their consumption basket the cost of living is supposed to increase. Also uncertainty about future will have an impact on the consumption expenditure. Most of the immigrants have halted sending money soon after referendum. Their savings decision has also changed. Considering these differences, it can be an interesting analytical issue to evaluate how the immediate impacts of Brexit are affecting their socio economic condition.
As the long run impacts of Brexit is still not clear it has put a high degree of uncertainty in people’s life. Migrants coming from Europe are in a vulnerable situation. They also have different perception about Brexit. Researchers are trying to forecast the long run impacts. On the other hand, the short run impacts are already observable and they are having a mixed impact on different heterogeneous groups. But there is very little published research on the effects of the short run impacts at household level and especially on the immigrants. In this research the short run impacts of Brexit and its effect on the immigrant household’s socio economic condition (real income, consumption, savings and investment decision and remittance sending to home country etc) will be thoroughly investigated.