Britain: Should I Stay or Should I Go?

Technical Analysis
13. Mai 2016
Britain: Should I Stay or Should I Go?

A few months back we introduced you to the issue that international media has dubbed Brexit – the prospect of the United Kingdom leaving the European Union, something Brits would decide in a referendum on June 23.  As we near that date, officials have spoken up more actively about the impact should Britain choose to separate from Europe. As we mentioned before, analysts and politicians from Europe and the United States have expressed concerns about the UK leaving. The Kingdom plays a vital role in the European Union as an economic and military power. Despite split views inside the UK, the country seems to benefit greatly from being a member state. Choosing to leave the EU would have its toll on the British economy. In fact, we are already seeing strong negative signs caused by the very speculation of leaving. Mark Carney, governor of the Bank of England, expressed his opinion earlier this week that leaving the EU would cause the United Kingdom to experience more inflation and slower rates of economic growth. He also stated that the British pound sterling will lose some of its value, perhaps to great losses for the British economy. His claims appear to be well-substantiated considering that the GBP has dropped by 8% versus the American dollar this past year and 2% only in 2016. The uncertainty to Britain’s future in the European Union is bringing additional volatility to the already-unstable global markets. Whether the United Kingdom will choose to stay or leave the EU is yet unclear. The latest polls show that opinions are pretty evenly split, with 46% voting to stay vs 43% wanting to leave, and some 11% abstaining, according to the Financial Times. As of the moment of this article’s publication the GBP/USD currency pair is trading at around 1.4355.

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