In 1993, the EU was created out of the ‘European Economic Community’ (EEC); a collection of European countries that banded together to prevent a repeat of the Second World War. The United Kingdom joined the EEC in 1973, 20 years before the formation of the EU, and there were great benefits for the countries involved. Economic trade boomed, international research and education flourished, and visa-free travel gave increased freedom for citizens from any of the 28 member states.
Many say, however, that over time the strict membership rules and growing number of EU policies, make it difficult for some member states to act independently and keep their national sovereignty. One of those member states is the UK.
On 20th February 2016, David Cameron, the British Prime Minister, announced a referendum would take place on 23rd June 2016 to vote on whether the UK, a key player and important part of the EU, would exit and ‘Brexit’ was born.
The Prime Minister is currently opposed to a UK departure from the EU, while the Mayor of London, Boris Johnson, is openly for it. Each of them has received a great deal of support (and criticism) from the press and the public, respectively. There has also been talk that Brexit could start a domino effect, including a Czechzit (Czech Republic-exit) and another Scottish bid for independence from the UK.
With so much foreign trade, investment and mobility depending on the UK’s involvement in the EU, the British pound has become very erratic under the uncertainty of the outcome. Although nobody knows what the result of the referendum will be, many believe that the British pound will only become more volatile as we get closer to 23rd June 2016.