A little more than two weeks after the United Kingdom voted to leave the European Union, the economic and development impacts of the referendum are beginning to take shape.
The instability caused by the referendum sent the British pound plummeting in the greatest one-day loss since the beginning of the Bretton Woods system. The currency now hovers at a 12 percent loss against the dollar, with knock-on effects for the U.K. aid budget. Currently valued at about $19 billion, British aid has lost $1.9 billion in value since the pound dropped.
The aid budget, experts warned, is now under even greater threat. Spending is tied by law to 0.7 percent of gross national income, but growth of gross domestic product will drop by an estimated 3 percent for 2016. The accompanying decline in GNI will cause a net reduction in aid.
About the author
Molly Andersmollyanders_dev
Molly Anders is a former U.K. correspondent for Devex. Based in London, she reports on development finance trends with a focus on British and European institutions. She is especially interested in evidence-based development and women’s economic empowerment, as well as innovative financing for the protection of migrants and refugees. Molly is a former Fulbright Scholar and studied Arabic in Syria, Jordan, Egypt and Morocco.
