Could Brexit Bring on Positive Effect to UK?

Positive Impact on inbound Tourism to Britain

Tourists vote with their feet for Brexit – As Brexit result released, the British Pound devalued significantly and that will create tourism growth in the UK. Chinese flock to tourist sites that offer holidays in the UK and the Kingdom ,one of the most desirable places to visit will get another boost after the fall of the pound.

Immigration Policy and Immigrants

UK decision to leave European Union actually bring policy makers to form an independent immigration policy as well as to decide for itself on how to fit in European immigration policy. That will cause  less spending on occupancy and solutions for immigrants and perhaps will evacuate more funds for British economy.

Britain Has not Really Been a full Member of the European Union

Even before Brexit is formalized, U.K. was outside many of Europe’s circles of authority. By choice, it’s not 1 of the 19 countries using the Euro currency.

UK also has not been not part of the 26 Schengen Area nations, which prohibits free border control between EU members. Although some major changes will take action, Britain was an independent force in the EU.

The Stock Market Impact

The stock market reaction may eventually prove overblown given that the theoretical long-term economic damage from Brexit is just 2 per cent of UK GDP. Plus if we will look on the company’s profits than GBP rate can improve their results because it can give a boost in to higher export and competitiveness in the world.

Markets Sentiment

Indexes for volatility are already lower than they were in February this year, suggesting that markets are not abnormally worried about the outlook and UK government borrowing costs are at an all-time low.

Despite reports of markets crashing following the Brexit result, when you put the current level of volatility in a context of other shocks, markets conditions are not as bad as they might seem. The FTSE 100 is still higher than it was barely two weeks ago and the more UK-focused FTSE 250 is currently higher than it was in late 2014. This is the kind of volatility that markets see two or three times a year.

The Effect of Devalued  Pound

The fall British Pound value following the Brexit result is also not as bad as it may first appear. The size of the fall was exacerbated by the previous day’s assumption that Remain would win. There is also precedent for a dramatic fall – after the ERM crisis – which proved beneficial for many British exporting companies and arguably helped sustain the economic recovery of the 1990s. 

Now after I mention supposedly fundamental economic reasons, let’s move on to some really interesting

Note the resemblance between the S&P 500 to FTSE100.  While S&P broke the record of the triangle between the years 1999-2012 and reached new highs, FTSE did not. I would not be surprised, and even supports the scenario of FTSE reaching to new highs as S&P did. All this off course depend on the FTSE behavior .

You can see the corresponding price channel in the chart below, presenting the indices highs and lows.

And, of course, necessary that the index will break the triangle records that appeared last year.