Dubai: British Prime Minister Boris Johnson’s decision to extend the annual suspension of parliament until two weeks before a Brexit deadline has increased fears of a chaotic and potentially damaging exit for the UK from the EU, due on October 31.
What does the prospect of a no-deal Brexit mean for people in the UAE and the wider Middle East? Gulf News explains:
Your shopping basket
The UAE and the UK are long-time trading partners and total trade between the UK and UAE rose by more than 12 per cent to $22.4 billion (Dh82.2 billion) in 2017. The UK’s exports to UAE amounted to £11.1 billion (Dh49.7 billion) while British imports from the UAE were £6.4 billion. A major part of this is food products — and while bilateral trade will not be starkly affected by a no-deal Brexit, the overall supply of British food products and fresh produce could get more scarce and more expensive. Supermarkets in the UK have warned that there could be empty shelves and higher prices. Modified tax structures and transport delays could all lead to a rise in prices — but for British exports to the UAE that could be mitigated by a fall in the value of the pound.
Your travel plans
If you are a European expat based in the UAE and planning to travel to the UK after Brexit, you might need to take extra measures. The same could apply to British expats based here and planning to travel to Europe. All EU member states and the British government has advised citizens and expats around the world to check if you have the right paperwork before you travel. But travel to Ireland will not change, even if there’s no deal. You’ll continue to be able to travel there in the same way as before.
According to Global Risk Insights (GRI), oil prices across the region will continue to be affected in case of a no-deal Brexit. It will persist so long as there remains political uncertainty surrounding a lack of leadership in a post-Brexit future. The immediate impact of this will be felt through volatile markets, although the impact in the Gulf region is likely to be less stark in the short run. As of November 2018, foreign investment in the UK fell by 19 per cent since the Brexit referendum.
Your real estate
Some analysts expect industries such as real estate to see a boon in business from investors in the Gulf and Middle East — since investors buying in dollar-pegged currencies such as the UAE dirham can pick up discounted deals. UK Trade Commissioner Simon Penney told the BBC: “While currency fluctuations may have an impact on some imports, sterling’s fluctuations have boosted the competitiveness of many UK exports and the trade flows between the UK and the Middle East remain very healthy.” While the uncertainty created by the Brexit process has led to buyers and sellers to sit tight, it might still create opportunities for real estate investors and prospective property buyers from the UAE and beyond.