Quote:
Originally Posted by Big Brian
As we we import more than we export, the potential lack of free trade will drive up the costs of both imports and exports which in turn will drive up inflation. To control this, interests rates will need to rise which means that mortgages and other borrowing costs will increase. Bit more complex than this but that is the simplistic version!
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Various governments have been having currency wars for the past few years in an attempt to cheapen their exports.
It should be noted that we import more than we export with regards to the European Union only. We have a positive current account with the rest of the world. Upon leaving the EU we would no longer be subject to the Common Customs Tariff which would reduce the cost of imports from outside the EU.
With those in mind I'd suggest the impact of Brexit is not black and white. There are far too many variables.
I'm sure if I could be bothered it wouldn't be hard to find plenty of 'experts' forecasting the UK's doom if we failed to join the Euro. The past few years seem to have tarnished the reputation of economics as a field in no small part because most economists don't seem to know backside from elbow when exposed to how things work outside of the classroom.