The Brexit vote result came as a real shock to voters aged 18-24 and left many young people feeling betrayed and worried about their future. More than 70% of that age group voted to stay in the EU, and an estimate by the Independent suggests that this number would go up to 82% for those aged between 16-17, which were not allowed to vote. Clearly, the youth majority wanted to stay in, and the result created serious and complex divisions within the British society and has generated a real feeling of despondency amongst students and school leavers towards British politics and the UK itself.
Reasons To Worry
Perhaps the greatest concern among the youth today is that their future is uncertain both in the short term and the long term. Arguably, this generation will be more adventurous and dynamic than those that preceded it and suddenly opportunities to live, work and study in Europe now seem to be at a crossroads. It is very easy to get caught up in this negativity but it is vital that young people accept the democratic will of the country and move on. It sounds like a cliché, but Brexit is very much what one makes of it.
In terms of economics and how Brexit will affect job prospects, it relies heavily on whether or not Britain can secure a favorable settlement. It is crucial that Britain remains in the single market and it would be a shock if that did not happen. In that case, Brexit will not have as damaging an impact as the country fears. However, in the short term, for students and young people about to leave school or university into an economy filled with uncertainty and worry it certainly will have an impact.
At the moment, most financial institutions are delaying their decisions until they see more data, but the cuts in graduate jobs and school leaver schemes seem almost inevitable. Perhaps the most frustrating thing for young people is that this settlement is in the hands of the mistrusted politicians and there is almost nothing that they can do to influence it.
A Talent Exodus?
Perhaps the biggest problem and one that has been largely ignored is the potential exodus of British talent abroad. A mixture of more exciting and potentially better job prospects coupled with an undercurrent of bitterness could result in British talent looking elsewhere to develop their careers. Similarly, it works the other way too, as excellent foreign talent currently attracted by the UK may look to other economic hubs. It is vital for the future of the UK to retain its best talent for all sorts of reasons, but entrepreneurship and job creation lay at the heart of it.
Bank of England Governor Mark Carney has stressed a message of calm and this approach has reflected well in the markets. The cut in interest rates to 0.25% marks a historic low and there really is not much more room for more monetary stimulus. The move is meant to keep the UK out of entering yet another recession. However, at these rates, monetary stabilisers can become ineffective therefore the government should also be proactive with fiscal policies in order to keep UK economic growth relatively stable. The markets and Carney are really waiting until the quarterly results come out to get a clear idea on the impact of Brexit on economic performance but the indicators do not paint a pretty picture.
The End Of Austerity?
Theresa May has already outlined plans to ease off austerity through tax cuts and increased government spending and this seems to be the most credible and economically efficient option. The dangers that George Osborne warned on in 2010 when austerity was introduced, such as the negative impact of a high debt/GDP ratio, volatility in the bond markets and a need to boost consumer confidence never really materialised.
Arguably, introducing austerity in 2010 actually deepened and prolonged the recession. The UK was finally starting to recover in the first few quarters of 2010 and then fell back into negative GDP growth as austerity measures began to take hold. Yet, austerity seemed to resonate with the voting public and the media. Therefore, Osborne promised more austerity measures if the Conservatives were re-elected in 2015 despite economic indicators pushing in a different direction. In this sense, the forced change away from austerity resulting from the Brexit vote should be seen as a positive one.
What Lies Ahead
The dust has now settled and the initial anger amongst the majority of the younger generation has subsided. However, there is still an underlying undercurrent of worry and resentment about what lies ahead. One must now rely on politicians and business leaders to guide the UK through upcoming times of economic and political uncertainty.