The votes have been cast and the decision has been made, but for many the implications of Brexit are still unclear. With one of the most searched terms being ‘what is Brexit’, Selective Networks thought that we would simplify the headlines into 5 easy to read chunks.
Mobile roaming charges:
As a result of not being part of the European Union, the cost of using your mobile abroad could increase. This is because by UK separating from the EU the new rules to wipe out roaming costs would no longer apply to consumers.
The agreement to abolish the cost of mobile roaming was a key victory for Brussels regulators overseeing the communications market. By June 2017 consumers across the EU will pay the same price to use their mobile devices in other member states as they do at home. However, UK mobile groups will no longer need to abide with the ruling. The exact impact is yet to be uncovered and will not be known until the terms of Britain’s exit from the EU are worked out.
Analysts at Ovum said that UK consumers could lose the benefits but added that the UK may continue to be part of the European Economic Area (EEA), as in the case of other countries such as Norway.
Prices at the pumps:
If the value of Sterling falls faster than oil prices, UK motorists will face higher petrol costs in the wake of the Brexit vote.
Over the last 2 years, motorists in the UK have been enjoying lower prices as the result of oil prices roughly halving from above $100 a barrel to less than $50. However prices have been steadily creeping higher since hitting a 13-year low below $30 in January and a continuing slide in sterling could intensify that effect.
Hike on the shelves:
The falling value of the pound will also affect costs on the high street, as companies that import goods from abroad pass on higher prices to consumers. It is unlikely that we will see these changes immediately and it could take years to fully notice this in our stores, however it would be necessary for a lot of businesses to survive.
Lord Wolfson, the Conservative peer and chief executive of Next, who was a prominent Vote Leave supporter, indicated that clothing prices could rise from next year.
“Most retailers will have covered forward the balance of this year so [the fall in sterling] will not be reflected in prices this year,” he said. “Next has covered 60 per cent of its requirement of dollars and euros for spring/summer next year and I imagine the rest of the industry will be in a similar position. So the volatility in currency markets will have no effect until the spring, maybe the summer of next year.”
Less time on the beach:
The fall in sterling also means foreign currency is more expensive and spending money will not go as far as it did last week. As travellers will now get less for their money, analysts suggest that more people will choose not to travel abroad this year and look for other options.
There is also a risk that cheap air fares may disappear. The EU’s single aviation area gives airlines freedom to fly across Europe without charge, and has enabled budget airlines such as easyJet to flourish. Unless the UK can negotiate access to the free aviation market, we could also see prices here start to increase.
Lower running costs:
One area where consumers could potentially benefit is electricity prices, which could fall if the price of oil and gas falls again. That would make the UK’s heavy energy users more competitive with companies overseas and aiding consumers.
In the wake of Britain’s decision to leave the EU, oil prices fell a further 6% on Friday as fears were raised that a broader economic slowdown could reduce demand. However the falling price of oil and gas had already plunged the sector into crisis in recent months, with 8,000 jobs in the North Sea Oil industry lost since 2014, according to its trade body’s own figures.
The Brexit campaign had promised to use freedom from the EU to reduce VAT on household energy bills, saving the average household about £60 a year. It could also allow the government to exit a requirement for the UK to produce about 30% of our electricity from renewable sources by 2020.