The United Kingdom's historic decision to become the first
sovereign country to vote to leave the European Union has
reverberated across the world.
Though it's unclear what a British divorce from Europe may look
like, the decision may have caused unintended consequences for
many Americans. Here's a look at six ways the Brexit may affect
the US.
1. Cheaper holidays to the UK
About one in 10 visitors to the UK is American. And the exchange
rate for the dollar is better for Americans in the wake of Brexit - it's
now worth $1.48, down about 8% from a year ago, and at its
lowest level since 1985.
This means Americans going to see Big Ben, Stonehenge or
Edinburgh Castle this summer can expect their dollar to go a lot
further, at least for now.
Michael Stitt, president of North America for Travelzoo, told the
BBC that he advises any American travellers to the UK to check on
the exchange rate right before a trip and to consider taking GBP
out while the exchange rate is low and the dollar is strong.
UK hotels will almost certainly offer deals and specials, he said,
and vacation operators will likely put together some "pretty
aggressive" packages for going on holiday to the UK.
On the inverse, British travellers may think twice before booking a
trip to the US because it will be more expensive, he said.
2. Higher airfares
Though an attractive exchange rate makes a summer trip to
London more affordable now, Brexit could make flying in and out
of the UK more expensive in the long term.
The UK currently operates under a single aviation market that
allows British airlines the freedom to fly between EU countries and
the right to fly within an EU country. The EU also has a similar
agreement with the US.
The outcome of last night's vote means the UK may lose its rights
to fly in and out those countries if new contracts are not
negotiated, according to Andrew Meaney, the head of transport for
economic consultancy Oxera.
Ultimately, airlines could struggle to meet the same amount of
demands with fewer services in and out of the UK. US airlines
could also consider replacing London with a city such as Dublin as
an entry point into Europe.
3. Uncertainty for Americans working in London
For American bankers living in London, the Brexit signals
uncertainty about the capital's status as the world's largest foreign
exchange market.
US banks will have to decide on moving thousands of jobs to other
major European cities such as Dublin, Frankfurt or Paris depending
on whether the UK is able to negotiate new trade deals to retain
access to the world's largest single market, the EU.
In a memo to staff on Friday, JPMorgan Chase CEO Jamie Dimon
indicated that though the company planned to maintain a large
presence in Britain, it would face significant hurdles.
"In the months ahead, however, we may need to make changes to
our European legal entity structure and the location of some roles,"
Mr Dimon said.
If Scotland should seek another referendum vote to leave the UK in
the wake of Brexit, American bankers may find themselves packing
their bags for Edinburgh, the second largest financial hub in the
UK.
4. Retirement funds in jeopardy
The Brexit has roiled global financial markets, with the US, UK,
Europe, Hong Kong, Tokyo and Sydney markets dropping at the
opening bell.
Many Americans are exposed to the stock market through their
retirement plan, also known as a 401(k) plan.
In fact, about half of America's full-time employees participate in
their company's 401(k), according to the Pew Charitable Trusts.
The UK's exit from the EU has already hit current market prices
and could potentially trigger a recession. Investments in global
stock markets expose Americans to such market turmoil, and
could result in one's equity portfolio losing value.
5. Property boom
The state of the UK economy is volatile, so American property is
looking like a very safe investment right now.
"Any time there is a recession in significant markets such as
London, it bodes well for the US," international real estate lawyer
and consultant Edward Mermelstein told the BBC.
"Investment will be attracted to a safe haven, and there's no safer
location than the US market... the US will be the beneficiary of
continued foreign investment due to the uncertainty created by this
vote."
Americans looking to buy property should expect prices to rise in
the next year - making right now a better time to buy rather than
waiting.
But in the meantime, as the Washington Post pointed out, current
mortgage rates will continue to be at an all-time low as foreign
investors seek US government debt, pulling down interest rates.
6. Game of Thrones on a shoestring
The UK film and TV industry will be badly hurt by Brexit, the
chairman of the Independent Film and Television Alliance told the
Verge..
"The decision to exit the European Union is a major blow to the UK
film and TV industry," Michael Ryan told the website. "Producing
films and television programs is a very expensive and very risky
business and certainty about the rules affecting the business is a
must."
HBO series Game of Thrones is largely filmed in Northern Ireland,
partly funded by the European Regional Development fund. It has
also been filmed in Spain, Croatia, Iceland and Malta. That funding
could go away, depending on how UK's EU exit is negotiated.
THE BBC
sovereign country to vote to leave the European Union has
reverberated across the world.
Though it's unclear what a British divorce from Europe may look
like, the decision may have caused unintended consequences for
many Americans. Here's a look at six ways the Brexit may affect
the US.
1. Cheaper holidays to the UK
About one in 10 visitors to the UK is American. And the exchange
rate for the dollar is better for Americans in the wake of Brexit - it's
now worth $1.48, down about 8% from a year ago, and at its
lowest level since 1985.
This means Americans going to see Big Ben, Stonehenge or
Edinburgh Castle this summer can expect their dollar to go a lot
further, at least for now.
Michael Stitt, president of North America for Travelzoo, told the
BBC that he advises any American travellers to the UK to check on
the exchange rate right before a trip and to consider taking GBP
out while the exchange rate is low and the dollar is strong.
UK hotels will almost certainly offer deals and specials, he said,
and vacation operators will likely put together some "pretty
aggressive" packages for going on holiday to the UK.
On the inverse, British travellers may think twice before booking a
trip to the US because it will be more expensive, he said.
2. Higher airfares
Though an attractive exchange rate makes a summer trip to
London more affordable now, Brexit could make flying in and out
of the UK more expensive in the long term.
The UK currently operates under a single aviation market that
allows British airlines the freedom to fly between EU countries and
the right to fly within an EU country. The EU also has a similar
agreement with the US.
The outcome of last night's vote means the UK may lose its rights
to fly in and out those countries if new contracts are not
negotiated, according to Andrew Meaney, the head of transport for
economic consultancy Oxera.
Ultimately, airlines could struggle to meet the same amount of
demands with fewer services in and out of the UK. US airlines
could also consider replacing London with a city such as Dublin as
an entry point into Europe.
3. Uncertainty for Americans working in London
For American bankers living in London, the Brexit signals
uncertainty about the capital's status as the world's largest foreign
exchange market.
US banks will have to decide on moving thousands of jobs to other
major European cities such as Dublin, Frankfurt or Paris depending
on whether the UK is able to negotiate new trade deals to retain
access to the world's largest single market, the EU.
In a memo to staff on Friday, JPMorgan Chase CEO Jamie Dimon
indicated that though the company planned to maintain a large
presence in Britain, it would face significant hurdles.
"In the months ahead, however, we may need to make changes to
our European legal entity structure and the location of some roles,"
Mr Dimon said.
If Scotland should seek another referendum vote to leave the UK in
the wake of Brexit, American bankers may find themselves packing
their bags for Edinburgh, the second largest financial hub in the
UK.
4. Retirement funds in jeopardy
The Brexit has roiled global financial markets, with the US, UK,
Europe, Hong Kong, Tokyo and Sydney markets dropping at the
opening bell.
Many Americans are exposed to the stock market through their
retirement plan, also known as a 401(k) plan.
In fact, about half of America's full-time employees participate in
their company's 401(k), according to the Pew Charitable Trusts.
The UK's exit from the EU has already hit current market prices
and could potentially trigger a recession. Investments in global
stock markets expose Americans to such market turmoil, and
could result in one's equity portfolio losing value.
5. Property boom
The state of the UK economy is volatile, so American property is
looking like a very safe investment right now.
"Any time there is a recession in significant markets such as
London, it bodes well for the US," international real estate lawyer
and consultant Edward Mermelstein told the BBC.
"Investment will be attracted to a safe haven, and there's no safer
location than the US market... the US will be the beneficiary of
continued foreign investment due to the uncertainty created by this
vote."
Americans looking to buy property should expect prices to rise in
the next year - making right now a better time to buy rather than
waiting.
But in the meantime, as the Washington Post pointed out, current
mortgage rates will continue to be at an all-time low as foreign
investors seek US government debt, pulling down interest rates.
6. Game of Thrones on a shoestring
The UK film and TV industry will be badly hurt by Brexit, the
chairman of the Independent Film and Television Alliance told the
Verge..
"The decision to exit the European Union is a major blow to the UK
film and TV industry," Michael Ryan told the website. "Producing
films and television programs is a very expensive and very risky
business and certainty about the rules affecting the business is a
must."
HBO series Game of Thrones is largely filmed in Northern Ireland,
partly funded by the European Regional Development fund. It has
also been filmed in Spain, Croatia, Iceland and Malta. That funding
could go away, depending on how UK's EU exit is negotiated.
THE BBC