Brexit

Loading the player...

What is 'Brexit'

Brexit is an abbreviation of "British exit", which refers to the June 23, 2016 referendum by British voters to exit the European Union. The referendum roiled global markets, including currencies, causing the British pound to fall to its lowest level in decades. Prime Minister David Cameron, who supported the UK remaining in the EU announced he would step down in October.

BREAKING DOWN 'Brexit'

Supporters of Brexit had based their opinion on a variety of factors from the global competitiveness of British businesses to concerns about immigration. Britain has already opted out of the EU's monetary union (meaning that it uses the pound instead of the euro) and the Schengen Area (meaning that it does not share open borders with a number of other European states). "Out" campaigners argue that Brussels' bureaucracy is a drag on the British economy and that EU laws and regulations are a threat to British sovereignty.

Mohamed El-Erian, the chief economic adviser at Allianz, wrote in a Bloomberg editorial that a British vote to leave the European Union would impose major instability on top of economic fragility and artificial financial markets. (See also: After Brexit: Who's Next?)

Popular support for Brexit had varied over time, but the June 23rd vote demonstrated that UK citizens believed that Great Britain can survive without the economic cooperation, trade agreements and partnerships that benefitted the country for the past several years. Brexit is tied in with Scotland's membership in the United Kingdom. Scotland had voted to remain in the European Union, and after the narrowly contested vote, First Minister Nicola Sturgeon said  in a statement on the Scottish National Party’s website that she would explore all options to remain in the EU.

RELATED TERMS
  1. Bremain

    Bremain is an abbreviation of "British Remain", which refers ...
  2. Italexit (Italeave)

    Italexit, short for "Italy exit," also known as Italeave, is ...
  3. GBP

    The abbreviation for the British pound sterling, the official ...
  4. Frexit

    Frexit – short for "French exit" – is a French spinoff of the ...
  5. Oustria

    Oustria, short for "Oust Austria," is an Austrian version of ...
  6. GBP/USD (British Pound/U.S. Dollar) ...

    The abbreviation for the British pound and U.S. dollar (GBP/USD) ...
Related Articles
  1. ETFs & Mutual Funds

    3 Top British Pound ETFs Suffer After Brexit Vote

    ETFs focused specifically on the British pound (GBP) have taken a beating on the heels of Britain's 'leave' vote.
  2. Markets

    How the Brexit Could Affect U.S. Investors

    Learn what Brexit is, who supports and opposes it, and when the referendum is to be held. Discover the possible consequences it may have on U.S. investors.
  3. Markets

    Yellen to Consider Brexit Repercussions At Fed Meeting

    Yellen has also remarked that a Brexit could change expectations and the appetite for risk among U.S. investors.
  4. Markets

    Is Brexit Really Europe's Biggest Threat? (EWU)

    Learn about the Brexit vote and its potential short-term consequences, but there may be an even bigger threat to the EU's long-term stability.
  5. Markets

    Analysts Predict Panic and Volatility After Brexit

    Analysts are coming out with bearish takes in the near term for the world economy after Brexit.
  6. Markets

    Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to leave the European Union in June of 2016.
  7. Investing

    4 Catalysts for Sudden Drawdowns in Equity Markets

    Learn about four potential risks to equity markets and how changes in the way markets view those risks could trigger a sudden drawdown.
  8. Markets

    Italexit (Italeave)

    Italexit, short for "Italy exit," also known as Italeave, is an Italian derivative of the term Brexit, which refers to the June 2016 United Kingdom vote to leave the European Union.
  9. Markets

    Oustria

    Oustria, short for "Oust Austria," is an Austrian version of the term Brexit, which originated in June of 2016 when the United Kingdom voted to leave the European Union.
RELATED FAQS
  1. Why the British Pound Is Stronger Than the U.S. Dollar

    Learn why the British pound is stronger than the U.S. dollar, despite the U.S. economy being larger than that of Britain ... Read Answer >>
  2. As a personal investor, should I be concerned about Brexit?

    How will the markets react moving forward to any news about Brexit? ... Read Answer >>
  3. What is the difference between a state and a federally chartered credit union?

    Learn how federal chartered credit unions are regulated by the NCUA, while state chartered unions are regulated by their ... Read Answer >>
  4. Why doesn't England use the euro?

    Understand why the United Kingdom has opted to not join the eurozone in adopting the euro over the pound sterling as its ... Read Answer >>
  5. Do businesses in states with right-to-work laws have demonstrably less deadweight ...

    Learn more about the economic impact of right-to-work laws and how unions impact production and purchase levels. Explore ... Read Answer >>
  6. Does the FDIC cover credit unions?

    Learn whether or not the FDIC insures your funds at a credit union, and what types of insurance are available at the different ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center