The BBC has expored a half-dozen ways that the British divorce from Europe may have caused unintended consequences for many Americans.
Here's a look at six ways the Brexit may affect the US from the BBC.
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," BBC reported. Michael Stitt, president of North America for Travelzoo, told the BBC that he advises any American travelers to the UK to check on the exchange rate right before a trip. On the other hand, British travelers may think twice before booking a trip to the US because it will be more expensive, he said.
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 BBC reported. The outcome of the Brexit 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.
Uncertainty for Americans Working in London
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," Dimon said.
Retirement funds in jeopardy
Many Americans are exposed to the stock market through their retirement plan, also known as a 401(k) plan. 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.
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." 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.
Lights, Camera, Action
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."
While many are fearful that Brexit could plunge nations around the globe into recession or worse, others don't expect the worst.
U.S. Treasury Secretary Jack Lew said the Brexit vote doesn’t signal the start of yet another global financial crisis.
Lew told CNBC
that the U.S. economy is doing "pretty well."
Lew did admit that that the decision of British voters to leave the European Union is "an additional headwind" for the U.S. and global economies but "there is no sense of a financial crisis developing."
Lew said, "I am not saying there will not be an impact on markets but it has been an orderly impact so far."
Lew said it would be important for economic policymakers to signal that they are prepared to use the tools they have to promote economic growth and "not overreact to a volatile day here and there."
Signaling concerns that countries might try to intervene in currency markets for trade advantages, Lew said, "We have made it clear that unilateral actions to intervene would be destabilizing."
(Newsmax wire services contributed to this report).
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