The Impact Of Brexit On Canada’s Wallets

There are various ways Brexit can affect Canada’s economy. After the voting results were revealed, both the Canadian dollar and pound sterling dropped, including the global market. For Canadians who have been saving for retirement, some were worried while others saw the 2008 economic crisis repeat itself.

#1. How Does This Affect Investments

Those with equities in Europe will feel the pinch according to financial analysts, there is a bigger crisis ahead that will take a toll on the market they warn. Banks in U.K do not seem to be affected by the ongoing chaos.

#2. The Real Estate Sector

The U.S. federal reserve is holding back on cutting interest rates, whereas the Bank of England will soon start cutting interest rates due to the chaos in the economy that followed Brexit. As for Canada, interest rates will continue to be low for a long while, which is bad news for potential home buyers or current homeowners. If the lowered interest rates continue, it will worsen the housing market situation in Vancouver and Toronto. Home buyers will not be able to afford houses in these cities and the value of the houses will increase, which will not tell well. To sum it up, this is a cause for alarm and not good news.

#3. The Worldwide Economy

European countries will face crisis in their economy and possibly a disentanglement in the EU. It will have a short-term impact on the world and Canada’s economic, hindering expansion in the market. The future of the rest of the EU members seems dim and unpredictable.

#4. Business And Companies In Canada

Those that will be affected by Brexit are companies with investments and shares in the U.K. Some are refraining from or having second thoughts about investing in the U.K as the country’s trade relations is largely undecided for now. U.K. accounts for just 2.5 percent of Canada’s trade, thus the impact won’t be severe. Nevertheless, those having investments and business in the United Kingdom will still have to struggle with the insecurity of the economical state.

#5. The Loonie

The loonie is decreasing in value and has lost more than a cent, with the rate being at 76.93 US cents. The currency will soften in the near future due to the global economic uncertainty, although the fall won’t be intense, it still does not put the mind of those planning to travel to U.S this summer at ease. The Pound sterling has dropped as the Europeans continue to deal with the outcome from Brexit. Canadians are worried about the state of the economy and are yet to see how they can tackle it.