Great Britain leaves European Union

Is Great Britain taking the right step towards a  better future?

The British people have voted to leave the EU. So what happens now? Later this morning Prime Minister David Cameron will address the nation outside 10 Downing Street. There is much speculation about his future, but he will probably seek first to reassure people.

He is likely emphasise that the process for leaving the EU set out in the treaty takes at least two years, and that very little will change during that time.

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However, the pound is already falling on the foreign exchange markets. The markets think that Brexit is bad for the economy, and so investors are likely to want to move their money out of the UK.
More expensive foreign holidays

The Prime Minister will probably say that the Government stands ready to do whatever it takes to protect the British economy, but there are limits to what it could actually do. George Osborne’s threat to bring in an emergency Budget would probably be downplayed until the effects of the Brexit vote become clearer.

In the meantime it will be up to the Bank of England to intervene in the foreign exchange markets – by buying pounds – to try to stabilise its value.

The first practical effect of a vote to Leave, therefore, is that the pound will be worth less abroad, meaning foreign holidays will cost us more.