The most important economic and political debate in the UK is how the UK will leave the EU. We are now getting into the detail of Brexit and, as the realities become apparent, some are suggesting many in the UK have changed their minds about leaving the EU. One politician, Vince Cable, alluded to this very recently and asked if we should think again about leaving the EU.
The Brexit vote was largely a result of migration into the UK from EU countries in the last 13 years, particularly from Eastern Europe. The UK was a job creating economy compared to the EU. However, there are two reasons to believe this will change. First, recent data shows the EU economy is growing faster than the UK (2% as opposed to 1.5%). Second, the UK is much less attractive to EU citizens who may feel unwelcome after Brexit. There are already indications net EU migration has fallen.
Companies’ investment intentions in the UK are apparently falling, many (especially banks) are making plans for setting up subsidiaries in EU states, and the recent decision, for example, to go ahead with a Euro fighter jet without the UK being involved, are all indications of the realities of what being outside the EU might mean for the UK.
The UK could leave the EU but stay in the single market by becoming a member of the European Economic Area. The UK would still have to pay into the costs of running the single market, abide by EU trade rules and, importantly, allow for the free movement of EU citizens. Whilst there is a doubt whether the EEA would accept the UK as a member, this looks to many to be our only real economic choice.