With Brexit becoming a reality in just under a month ago, it’s probably a smart move to look at how our finances will be affected.
To be quite honest, I don’t have a clue, you don’t have a clue, none of us have a clue – but we can at least TRY to give you an idea.
London seemed joined by a number of other major UK cities in wanting to stay, but that doesn’t matter now, so we need to begin planning for the future.
Only one other country has left the EU, Greenland – and that was in 1985, so we’re very much going to be seen as the world’s guinea pigs for the time being – if we can manage it, don’t be surprised if we are the reason the EU completely crumbles.
With the main export being fish, Greenland however, is not the best comparison.
The Pound
It’s not even worth giving a definite figure of the current state of the pound, to say ‘it’s all over the place’ is a huge understatement. Realistically, the best we can tell you is that is fell to its lowest levels since 1985 (when Greenland left, coincidently) when the result was first announced, but there the pound has recently enjoyed it’s best week since 2009… so it’s anyone’s guess as to how valuable our notes will be in two weeks’ time.
Summary: Anyone’s guess.
Mortgages
The Treasury predicted Brexit would result in a change between 0.7% and 1.1% in borrowing costs, with Cameron suggesting the average mortgage cost could increase by £1,000 per year for each household .
A rise in interest rates would have affected rented accommodation, as costs for landlords would go up.
But after an apparent 80% chance the Bank of England would cut interest rates (therefore making renting CHEAPER), it has decided to leave them as they are for the time being, so as it stands, mortgages are looking stable.
Summary: Anyone’s guess.
House prices
Leading up to Brexit, we were warned house prices would take a sharp fall, based on the assumption that mortgages would rise – However, as we’ve just discussed, morgages are currently looking ‘fine’,
With that said, The treasury predicts house prices could be hit between 10% & 18% over the next two year, compared to where they’d be had we chose to stay in the EU. In a nutshell, this would have been good news for first-time buyers, but a hit for existing homeowners.
Summary: Anyone’s guess.
Wages
You may have noticed a pattern by now…
The Treasury predicted that wages will be between 2.8% and 4% lower upon a Brexit vote, with your typical full-time worker a minimum of £780 a year worse off.
Then again, predicting the economy of two year’s time is practically impossible, so much could change which will benefit/impact upon the UK, and not to mention we’ll still be in the EU for another two years – so it’s that time again…
Summary: Anyone’s guess.
Conclusion
With all of this said and done, how can we possibly conclude the financial impact of Brexit and you and me? – Well, quite easy really. It’s anyone’s guess!
