After the long debate on whether to stay or remain in the European Union, the United Kingdom finally voted to leave. The decision will mean that there will be a host of changes, including the cost of living in the coming years.
Traveling will never be the same again
While British leaders foresee the movement to have a positive impact on the value of the pound, making most people from the UK richer and able to afford holidays, there’s still uncertainty when this will become a reality.
If Brexit isn’t successful in the long run, the economy will stutter which will lead to higher taxes, higher unemployment rates and the value of the pound will drop further.
According to a post by the Telegraph, some of the possible negative travel effects of Brexit includes higher airfares, re-introducing of border checks, more expensive phone roaming charges, return of duty taxes and stricter rules for Brits working in the EU.
Oil and gas prices may drop soon
Some possible good news is that the UK’s import and export deals could have a positive impact on the economy.
While experts foresee Brexit to have no major impact on the UK’s oil and gas industry, many industry leaders still call for strong leadership to avoid uncertainty in the future.
Based on reports, there’s a possibility of a huge drop in petrol prices in the region, as oversupply will affect them greatly with Aberdeen, Europe’s oil capital no longer being part of the EU due to the results of the referendum.
Earlier this year, oversupply was also the biggest problem in the global oil and gas market, which impacted the price of crude worldwide.
It has affected a host of companies, particularly the small players, with some being forced to file for bankruptcy and shut down their production. The rest is made up of multi-national corporations, with some experiencing controversy amidst troubling times in the industry, as well as the major corporations having to handle economic issues related to the supply and demand of oil and gas.
Small oil companies in the UK are said to have a tougher time managing their hold on the market over the next two years.
“If smaller [oil] companies want to develop assets or raise money for investments, it is going to be harder in the next two years,” said Wood Mackenzie energy chief analyst Simon Flowers. “It’s hard anyway because of low oil prices, but this is going to make it tougher still.”
Expect prices of commodities to rise
With the possibility of the British pound weakening further, it will force stores to raise prices.
Companies that import goods from overseas will pass on their higher prices to the consumer. However, analysts said it would be unlikely to happen immediately due to “hedges” that extends for several months. The moment those hedges expire, which experts suggest will probably start in spring or summer next year, shops will be faced with a choice as to whether they should increase prices to avoid risking going out of business.
“If we’re going to have a consumer recession, the companies that are going to be squeezed are the ones selling big-ticket items,” said Haitong Securities analyst Tony Shiret. “People are going to get much more price-sensitive about things like widescreen televisions. It won’t make so much difference if you’re selling socks and jumpers.”