Brexit

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.

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