best-case scenario to a 0.8 percent contraction if things go really bad. And that is to say nothing of what might happen to the EU, which, even without Britain, boasts a market equal to that of the United States. Should Canada and the rest of the world worry about Brexit and it’s economic impact? If you listen to the current government, most are saying no. Many are saying that it is just another bump in the economic road and both the EU and the United Kingdom have strong incentives to renegotiate a trade deal. This could turn out to be one of the biggest non-events in economic history. Well that could be true, but the United Kingdom is Canada’s third-biggest trade partner after the United States and China, yet it represents only about three per cent of exports. This implies, for some, that a recession in Britain would do little harm to Canada, whose fortunes are far more tied to United States, an economy that is set to surpass the United Kingdom as the G7’s new growth champion.
they have with dozens of countries that have negoti- ated trade agreements with the EU and the countries of the EU themselves. “I don’t know if it means a thousand jobs, 2,000 jobs” are at risk of being cut because of Brexit, Jamie Dimon, CEO of J.P. Morgan said. “It could be as many as 4,000 and there would be jobs…all around the U.K.,” that could go. J.P. Morgan has roughly 16,000 people working for it in the U.K. It’s entirely possible the people of Britain have just become the first in history to vote for a recession. At a minimum, they have curbed their country’s short-term economic prospects. The International Monetary Fund said earlier this month that the United Kingdom’s gross domestic product was on track to grow 2.2 percent in 2017. Brexit could force a revision to 1.4 percent under a
Financial markets are very fragile and events like Brexit
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SPOTLIGHT ON BUSINESS • JULY 2016
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