When Britons voted narrowly to exit the European Union in a public referendum earlier this year, they may not have envisaged the ensuing shock to the country’s currency and financial reputation.
But now, with sterling languishing at its lowest value in 40 years and the UK stripped of its Triple-A credit rating, the country is also facing the possible loss of its reserve currency status, should it fail to secure continued access to the European single market.
US ratings agency Standard & Poor has admitted that the British government is risking significant damage to the economy’s growth, with potentially long-term implications for the country’s debt and credit profile. S&P fears that if the UK loses access to the single market, its businesses will suffer incalculable consequences for the foreseeable future.
Employed or self-employed?
In a decision that could have significant implications for thousands of employers and workers in the so-called ‘gig economy’ in the UK, Uber drivers have won the right to be paid the national living wage.
The case, brought by two workers leaves the ride-hailing company open to claims from some 40,000 drivers in the UK and could further pressure other companies to review the way staff are contracted and paid.
Uber had argued it was essentially a tech company, and that its drivers were self-employed contractors able to choose when and where to work. In turn, this gave the company a free pass on workers’ rights, including the obligation to pay a national living wage and other perks such as holiday and sick pay.
Fun and games
In June this year, the British public voted in a referendum to leave the European Union. The fallout from what, for many, was a shock result, was nothing short of dramatic and the aftermath left a kingdom that seemed very far from united.
Fast forward to the end of August and while the world has been distracted by the games of the 31st Olympiad, heated discussions between Brexiteers and Remainers have subsided into barbed comments traded across social media and a kind of normality has been restored. Business as usual, then. Well, maybe. But while Usain Bolt is packing his running shoes away, it seems like Brexit hasn’t even left the starting blocks.
Where do we go from here?
It seems certain that the UK is set on a course to leave the European Union, following a public referendum in June. Speculation is now focused on the terms of Britain’s Brexit and how its government will frame and maintain a continued relationship with its biggest trading partner as the country moves into a new phase of history.
There are only a limited number of options available. Possibly the most likely route would – ironically – be the one that bears the closest resemblance to the UK’s existing EU membership model: the ‘Norway’ option. An approach also shared by Liechtenstein and Iceland, it would involve Britain becoming part of the European Economic Area (EEA) and would confer access to the European single market.
IMF expresses fears over Eurozone growth
Uncertainty about the future of the European Union is affecting economic stability across the single currency bloc. The growth outlook for the Eurozone has been downgraded by the International Monetary Fund (IMF) in the wake of the UK’s Brexit vote, with its managing director, Christine Lagarde, warning of an economic slowdown as confidence dips and markets suffer increased volatility.
GDP in the eurozone is only expected to grow by 1.6% this year, with a further drop to 1.4% in 2017, which represents a contraction from 2015’s 1.7% expansion. The IMF said this was ‘mainly due to the negative impact of the UK referendum’ and was in line with the organisation’s pre-Brexit predictions.
Following Britain’s vote for Brexit, political parties in other countries are calling for people to be given a voice on their membership of the European Union. But, after the global reaction to the UK’s momentous decision, how likely are other members to push for referendum?