Working with Toby, Harry and Robbie we created a Brexit presentation for our economic exam talking about different macro economic factors and political parties. 80% Pass

1. BREXIT
Toby Dabell Harry Agnew Tara Ambrose Robbie McDermott
In this presentation we will discuss:
• Political parties
• Hard or soft Brexit
• Unemployment
• Interest Rates
• Growth Domestic Product
• Exchange Rates
• Inflation
• Independent Analysis
• Latest News
The United Kingdoms’ withdrawal from the European
Union is widely known as Brexit, a portmanteau of ‘British’
and ‘exit’. Following a referendum held on 23rd June 2016
in which 52% of votes cast were in favor of leaving the EU.

2. •
“EU has helped keep the peace in Europe for decade”
“The only party fighting to keep Britain
open, tolerant and united.”
Help release Britain from EU control so that
you and those you love can truthfully say,
“We are a free people making our own
decisions.”
May: Brexit must produce “a fair
deal at home”, not just in Europe

3. Theresa May: 'I don't accept the terms hard
and soft Brexit'
Brexit means Brexit
Soft Brexit
Individual
deals
Some free
movement
Financial
trade
deals
Keeping some
aspects of
single market
membership
Hard
Brexit
No
single
markets
Control
free
movement
No
customs
unit
No banking
passport
Essential for
economic
growth

4. Unemployment prediction
before referendum
• No triggering of article 50.
• Fears of post-referendum recession from a vote of Brexit prove wrong
• Consumer spending strong, unemployment low and the housing market holding
steady (The Guardian, 2016).
• Unemployment fell from 5.1% January 2016 to 4.8% October 2016.
• Referendum date 23rd June 2016 (Office of National Statistics, 2016).
• Lowest rate since September 2005.
Unemployment - What has
actually happened
(Office of National
Statistics, 2016).
• Benefits should of increased in line with predictions
• However, predictions showed short term growth outside the EU to be slow – less money for government
• Therefore benefits where predicted to decrease to cover the costs of less government income.
• Welfare Budget amounts to 28% of government spending.
• Some families where predicted to lose up to £2,771 a year.
• Experts predicted unemployment to rise
• Reduce pressures for wage growth.
• Wages between 2.8% and 4% lower
• Typical worker £780 (BBC News, 2016).
24th June 2016 - pre prediction.
• An EU exit will raise unemployment and heighten
the risk of a "serious negative shock" to the British
economy in the next five years (International
Business Times, 2016). [May 2016].
• HM Treasury analysis – two scenarios after two
years of article 50 being triggered.
• Shock = fall in the pound – around 12%,
unemployment to increase by around
500,000 – with all regions experiencing a
rise in the number of people out of work.
• Severe shock = fall in the pound – around
15%, unemployment to increase around
800,000 (Gov.uk, 2016). [May 2016].
UN-
EMPLOYMENT

5. Speculators Interest Rate
Predictions
• Head of the IMF Christine Lagarde said she could
not see ANYTHING positive to come from leaving
the EU and an exit could have "particularly severe"
consequences.
• Ms Lagarde added that interest rates could also rise
sharply in the event of leaving Europe, which would
negatively impact on households with high debts.
• The Bank of England under Mark Carney's
leadership also warned interest rates could rise,
and that a recession couldn't be ruled out.
• George Osborne warned that house prices will fall
and the cost of mortgages will rise if Britain leaves
the European Union.
In fact, the Bank cut interest rates following the Brexit
vote.
How will falling interest rates impact the economy?
Mortgage payments
The real winners from a cut in interest rates are mortgage owners, who could see a £22 a
month cut in their average monthly repayment bill. This is a significant increase in
disposable income during a time of stagnant wages. It can take up to 18 months for an
interest rate cut to feed through into the economy (e.g. people on fixed rate mortgages)
Savers
The rate cut will impact savers, who will have to work their money harder for better
returns. Saving in bog-standard accounts just got even worse.
Housing prices
Capital Economics said in its forecast, which factors in a 0.25% base rate, UK house prices
should rise by 2% in 2016, 2% in 2017, and 3% in 2018 according to the Guardian

6. GROWTH DOMESTIC PRODUCT
(GDP)
GDP is the Monetary value of all finished goods and services produced within a country’s boarders in a specific
time period.
Monetary Value is the monetary worth of an asset, good or service.
British businesses continued to invest.
Business investment rose 0.9% in the July-to-September. (forecasted 0.6%)
A contribution to growth from net trade.(Difference between Imports and Exports. Imports fell – Exports grew)
Consumer spending continued to be the main driver of economic growth, fuelled by rising household incomes.
Why is there an increase?
PREDICTIONS.
• Many economists prior to the
referendum had predicted an
immediate and significant impact on
the UK economy and consumer
confidence should the country vote
to leave the EU. But so far these
predictions have not come to pass.
• George Osborne and his Treasury,
had predicted Britain would fall into
immediate recession after a Brexit
vote, with GDP coming in at -0.1 per
cent in the third quarter of 2016.
• The IMF said Brexit could reduce the
UK economy by as much as 9.5%,
and added that Britain could expect
"sizeable" long-term losses in
income.
• However, Britain's economy grew by
0.5 per cent in the three months after
the vote, providing evidence that the
vote did not cause a negative impact
on the UK.

7. Exchange Rates
Brexiters recognised that a sharp devaluation would be
almost inevitable after Brexit. On 22 December the
pound was worth $1.23 - compared with $1.47 pre-
referendum
How it is affecting the UK economy
The price of imported food and other goods is rising
because of sterling’s depreciation. And the price of raw
materials for UK firms, which tend to be priced in
dollars, is also increasing pretty rapidly according to the
Independent.
The Bank of England thinks consumer price inflation will
spike above its 2.5 per cent target by the beginning of
2018.
This means that the weekly food shop is likely to be
more expensive relatively soon.
Some exporters will benefit from the slide in sterling. Their
exports will become instantly cheaper on world markets.
They could hike sales prices to increase short-term profits.
Healthcare companies listed in the UK such as
GlaxoSmithKline and British Aerospace's share price hit a
new 12-month high.

8. Inflation
• “Because the pound would be worth less, everything we import would become more
expensive, increasing inflation and hurting family budgets” – Mr Cameron and
Mr Osborne
• The pound has fallen and inflation is expected to rise, although the effects take time
to work through the economy (The Telegraph, 2016).
• As for inflation, November 2016 - 0.6%. December 2016 figures just released – 1.1%.
• Highest rate in three years (BBC News, 2017).
• Closer to target of 2% +/-1% set by Monetary Policy Committee of the Bank of
England.
What was predicted?
What has actually happened?

9. Independent analysis
It appears the predictions from the following: George Osborne, Christine Lagarde IMF and
Mark Carney's suggested there would be collapse in the economy.
Their point of view which was not clearly set out was:- ‘very flawed and very partisan’
according to a recent Cambridge University study. –
If we leave the EU, the single market dies
Uncontrollable levels of inflation would occur, primarily due to the Tariffs increasing the cost
of goods and services.
To tackle higher levels of inflation, monetary policies would have to be used to increase
interest rates
Effect – The cost of borrowing increases, Debt increases, house prices collapses and monthly
repayments rise.
Result – Less household income which causes reduced spending. Resulting in an economic
contraction. Research before the referendum claimed UK household would each loose out by
£4,300 a year if the EU membership referendum vote on 23 June resulted in the UK leaving
the European Union.
A Treasury document claiming the UK economy would shrink by 6% if Britain left the EU has
been criticised by Conservative MPs from the Vote Leave campaign as well as
some economists.
This may still occur as Thersa May announced the likely hood of a hard brexit because some
factors are non-negotiable

10. Latest News
Senior
LATEST
NEWS
• As most financial markets still
believe Britain will vote to
remain (regardless of the
polls), the impact of a Brexit
vote is likely to be
considerable. The pound will
almost certainly fall
significantly, as will share
prices, with banking stocks and
multinationals hardest hit.
Brexit: Theresa May blames media for
misrepresenting her EU comments leading
to slump in pound
It comes after her interview with Sky News
in which she repeated previous answers
about her approach to Brexit
Brexit: Top economist reveals
what he thinks will happen
next after the EU referendum
vote
Brexit: Next warns prices could rise by 5%
in 2017 as drop in the pound hit profits