InvestorQ : With a new prime minister in UK, Boris Johnson, taking over, what does it mean for BREXIT options?
manisha Kolvenkar made post

With a new prime minister in UK, Boris Johnson, taking over, what does it mean for BREXIT options?

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Aditi Sharma answered.
1 year ago

As Boris Johnson laid out very clearly in his speech, he will look to push through a solution to BREXIT by October 31st. He has pointed at 3 options in front of Britain, and each of these methods could pose a challenge. Here are the 3 BREXIT options in front of UK.

· Fresh elections can be called and then a decision taken. Just that people will get tired if elections are held too often. This would be a political situation to an economic problem. Nothing much would change on the ground. With the referendum initiated by David Cameron clearly voting in favour of BREXIT, UK really does not have too many options! Boris Johnson has been a strong votary of BREXIT and in him UK has the best chance of finding a solution to the BREXIT issue. People may not be really keen on another election or another referendum so these options may be ruled out.

· Sharpen your knives and opt for no-deal BREXIT. Johnson even affirmed that he was willing for a no-deal BREXIT. However, such a no-deal would be easier said than done. UK still depends on the EU region for most of its trade. Post BREXIT, UK loses the preferential treatment given to EU members and will be on its own. The Bank of England has estimated that a no-deal BREXIT could compress GDP by 7-8%.

· Carefully crafting a BREXIT deal that is acceptable to both parties will be the best solution. This is the most sensible option for Britain. Both the UK and EU will have to meet half way and Christine Lagarde at the ECB should make things easier for UK and EU to sit across. She is less hawkish than Draghi. Also, UK is a key interlocutor for the EU’s relationship with the US. A mid-way with some compromises is the best bet.

It looks like most likely the EU and UK would get together to stitch a BREXIT deal to the satisfaction of all.