- Literature review
At present, the UK has experienced some slow growth, because some banks have moved their headquarters to a different country. Also, the euro has started to weaken, an implication that things have begun taking an unusual move. While it’s too early to speculate what will happen to the EU after the transition, it is uncertain how the move will impact it, and if its future will be inevitable. There no much information on this, but the move could primarily affect EU operations. However, taking advantage of the Neo-functionalist theory or theory of differentiated disintegration will help the UK government negotiate new proposals for integration with the EU. This will reduce the current negative impacts Brexit to its economy.
Although the UK is pushing for new trade deals with the EU to stop trade barriers and stop new tariffs, it is uncertain if this changes the current UK’s trading partnership with other countries (Warner, n.d.). There could be better deals with other countries that can make the UK finance industry grow. The UK can apply the theory of economic integration to target developing countries and any other possible inclusion. Previous researches have proposed for more deliberation on alternative policies that are yet addressed. This paper will establish if there are alternative policies put in place or being discussed and how they are likely to improve or impact the Brexit move (McMahon, 2016). Uncertainty of Brexit’s impact on the social, political, and economic future of Britain, not forgetting other issues such as trade in goods and services, pass-porting, agriculture, fisheries, and financial regulations, which other researchers have recommended for further research. All these will play a role in shaping the UK’s financial industry and the global economy.
UK, Germany, France, and Italy are the main contributor to the EU fiancé. It will be interesting to know what happens after the UK pays the divorce fees. There is a need for more research on the aftermath. However, there is critical EU’s controversial Brexit deal demands that UK-EU should agree upon and which could lead to clashes between the two parties (Milne and Bloom, 2020). It is a worrying situation that is likely to turn the economy to a different angle.
The underlying effect implies policy uncertainty, which is likely to affect the UK. Also, the shift of investment from the UK to other countries means low trade in the country and less foreign investment (Handley and Limao, 2015: Van Reenen, 2016). Therefore, the research paper will use trade and investment under policy uncertainty to handle the issue of the dynamic effect of the risk and apply the theory of internalization to see how the UK can protect its financial service dominance.