On the news it was stated that the UK leaving the EU has already caused trillions of dollars of loss to the world economy. While the newscaster made it sound very serious, I don't have any international finances at all, and my employer only operates in North America. It seems to me that the ripples will be so small by the time they reach me that I wouldn't even notice, but I don't know much about the global economy.

Is the buying power of the USD likely to fall? Will certain categories of goods become more expensive than others? Will employment rates change significantly? Interest rates on savings and/or debt?

Will my pocketbook really notice over here in the USA?


1 Answer 1


There will be many effects, but most of them are too small or too difficult to measure for you to notice anything.

Some examples of the bigger effects:

  1. If you have a pension or own any stocks (hopefully you do), you will have been negatively affected - even though you don't have any 'international' finances. Since the world economy is highly integrated, losses in the UK are correlated with losses in the U.S., Japan, and other world markets. For example, after the news of Brexit broke, the S&P (one of the US stock market indices) fell roughly 100 points. The markets tend to move together (the reason behind this is another question in of itself), so any changes in Britain will affect Americans as well. We're still not sure about the long-term economic effects of this, since we don't know exactly how/when/if the U.K. will exit, but the short-term uncertainty is causing investors to be nervous.
  2. British things will be cheaper! The pound fell, meaning that it's cheaper for Americans to buy British things, and more expensive for the British to buy American things. If you wanted to visit the U.K., it's going to be relatively cheap. The simplest effect is that the fall of the pound will positively affect U.S. consumers of British goods, and negatively affect U.S. exporters who export to the U.K..

  3. There may be some effect on your work, but it's impossible for you to know (which is part of the problem. Although your employer may appear to be completely local, it's important to remember that since we're so globalized, there probably will be some effect at your company. For example, one of your company's clients may purchase services from a consultant in the U.K, and this might affect your client, in turn affecting you. It's this kind of domino effect and the uncertainty that Brexit has caused that has so many politicians and economists worried about what might happen.


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