Soft Brexit Vs Hard Brexit: The Potential Impact On The UK Economy

Soft Brexit Vs Hard Brexit: The Potential Impact On The UK Economy

Prime Minister Theresa May has revealed that Article 50 will be triggered in March, and the UK’s complex exit from the European Union will commence.

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Prime Minister Theresa May has revealed that Article 50 will be triggered in March, and the UK’s complex exit from the European Union will commence.

The UK public voted to leave the EU on June 23rd, and the economic future of Britain seems uncertain.

It’s unclear which Brexit will occur, hard or soft. A hard Brexit strictly refers to the UK giving up access to the customs union and single market, allowing Britain to properly control its legislation and borders.

A soft Brexit, however, would restore many of the UK’s previous arrangements and retain access to the single market. This way, the UK won’t be forced to pay fees and tariffs for the trading of goods and services, but may have to accept the free movement of people, something Brexiteers reject.

There has been fierce debate among the public, politicians, journalists and beyond about the implications of Brexit, and the differences between a soft Brexit and a hard Brexit.

Even though Article 50 hasn’t yet been triggered, the UK’s economy has been badly shaken numerous times, typically immediately after Theresa May reveals her plans.

The Pound has plummeted to a 31-year-low, banks have threatened to leave and various companies, industries and wholesalers appear reluctant to situate in the UK.

Despite many fears and the Pound’s well-documented slide, the British Economy has actually faired better than predicted before the referendum, growing faster this year.

Former Chancellor of the Exchequer George Osborne said: “A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession.”

However, economists now anticipate a growth of 1.9% in 2016, compared with an estimated 1.8% before the June referendum.

Despite these more promising signs, it should be noted that Article 50 still hasn’t been triggered, so the economy could be completely transformed once the divorce process begins. It appears the UK public are determined to reject the free movement of people, so that would mean a hard Brexit, which will certainly impact the economy.

This has been reaffirmed by Lord Hill, a close ally of former Prime Minister and Remainer David Cameron. Lord Hill, Conservative, has labelled a hard Brexit, “a stupid Brexit”.

“I think there is a surprisingly widely-held view that Britain might still decide to stay in.”

“I think they also believe, when people start to look at the practical consequences of disentangling ourselves from this very complicated relationship, then maybe we will think again.”

“I think the choice is between stupid Brexit and more intelligent Brexit and that is what we need to go for.”

“My whole approach to this would be that if we approach it in a sensible way, because the European system is a deal-based system. There is more scope for trying to resolve it intelligently than if we go at it in a way where we all end up shouting at each other.”

This is likely to enrage Brexiteers, who consistently lash out at suggestions of retaining the free movement of people culture, and wants Britain to regain full control of its borders.

However, it appears the British people are getting what they want in terms of the negotiating team. Theresa May, who famous decreed that “Brexit means Brexit”, has twice the trust of the voters when compared with Labour leader Jeremy Corbyn.

In a vote conducted by YouGov, 47% of the stimulus said it preferred a hard Brexit, defeating the 39% who preferred a soft Brexit.