Take Brexit Britain and Trump’s America. Add climate change, instability in the Middle East, cryptocurrencies, and self-driving cars… and you have the world in 2018: hopeful, yet seemingly unpredictable.

We have assembled 11 unlikely events that - if they somehow happened - have the potential to profoundly affect the world as we know it.

To assess the political, economic, financial, and social impacts, IG brought together global economic/political experts to give their perspectives and predictions.

Explore some of the great unknowns facing us all today

EU wall graphic

What If

Britain crashes out of the EU without a deal

Pic: Paul Bissegger

The result of the Brexit referendum in 2016 came as a surprise to many, including the British government which had no formal plan in place for what would happen if the country voted ‘leave’. Internal debate mixed with fraught EU negotiations has given Prime Minister Theresa May a headache, but is there any chance Britain will exit without a deal in place?

Category: Politics Region: Europe

map of europe

Our panel of experts (interviewed March-May 2018):

John Kicklighter

John Kicklighter

Chief Currency Strategist, IG

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John Kicklighter is Chief Currency Strategist and head of DailyFX in New York City and San Francisco. He specialises in combining fundamental and technical analysis with money management. On his personal accounts, he trades spot currency, financial futures, commodities, stocks and options. Kicklighter holds a Finance and Investment degree from the Zicklin School of Business at Baruch College in New York City.

Ben Page

Ben Page

CEO, Ipsos MORI

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Ben Page is Chief Executive of Ipsos MORI. A graduate of Oxford University, Page is a frequent writer and speaker on trends, leadership and performance management. He has previously worked for companies including Shell, BAE Systems, Sky TV and IBM. Page has also worked closely with ministers and senior policy makers across government, leading on work for Downing Street, the Cabinet Office, the Home Office and the Department of Health.

Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

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Robert Kelly is a Professor in the Department of Political Science and Diplomacy, Pusan National University in South Korea. His work focuses on international security and political economy. His areas of interest are East Asian security, US foreign policy, the Middle East, the World Bank and the International Monetary Fund. Kelly has appeared as an analyst on television news services, including the BBC and CNN.

[ What if this happened? ]

John Kicklighter
John Kicklighter
Sterling would crash and local capital markets would be roiled.
Ben Page
Ben Page
Britain will be poorer. But of course, the people who voted for Brexit don’t mind that. That was not one of their concerns. They expect to be poorer, and they don’t mind.
Robert Kelly
Robert Kelly
The pound would drop and market reaction would be almost immediate. There would also be accelerating chaos among firms and EU nationals living in Britain who may suddenly have no formal status. These people would show up on CNBC and the business channels complaining. Then would come a wave of complaints from firms on the continent.

[ Likelihood ]

We asked our experts to rate how likely it is that Britain will crash out of the EU without a deal.

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[ Impact ]

Panel members also rated the impact they would expect this event to have.

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The Political Impact

John Kicklighter

John Kicklighter

Chief Currency Strategist, IG

By the time we reach a hard Brexit we would already have likely experienced a number of political upheavals, as parties were shaken up and the pressure for another election increased.
Ben Page

Ben Page

CEO, Ipsos MORI

You’d have inflation. Prices in shops could easily go up by 5% because of tariffs on food imports. This doesn’t seem like much, but it is quite a lot if your income is only going up by 1.8% and for people who are on very low incomes and haven’t got any spare money anyway.
Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

This would lead to real acrimony between the EU and Britain, and probably the fall of the UK government. This in turn, might lead to a strange period of isolation for Britain in the West. The Brits have always been ambivalent about the EU. If they crash out, generating all sorts of weird costs for everyone, they will be persona non grata for a while. But all the relevant players are democracies, so there will be no violence or repression.
The EU referendum was held in 2016. After an emotional campaign from both sides, which split political parties as well as the general public, Leave won with 51.89% of the vote. Then Prime Minister David Cameron resigned, leaving his successor, the then-home secretary Theresa May, to take charge of Brexit negotiations.

The Economic Impact

John Kicklighter

John Kicklighter

Chief Currency Strategist, IG

A crash out of the EU would have a distinct impact first on confidence – business, investor, consumer – which would act as a self-fulfilling outcome for economic pain. Loss of the trade and financial benefits of the single market would have large ramifications for years down the line.
Ben Page

Ben Page

CEO, Ipsos MORI

If there is no deal, we would likely see more inflation and an economic shock, but it may not unfold overnight. I can’t really imagine planes stopping flying or suddenly lorries waiting hours to cross the channel – but overall growth, already the slowest in the Organisation for Economic Co-operation and Development post-2017, would take a further hit and it is possible growth would go negative. Whether any of this leads to a change in sentiment about Brexit is not clear, but there will be less disposable income and likely rising anxiety about the future, and Remain voters will feel even more agitated and pessimistic. In farming, we might get machines picking crops instead of people. If Brits aren’t willing to do it for £7.50 an hour, and you decide that you can still sell your product, then you may invest in machines to make burgers, serve coffee or pick vegetables. But it’s usually cheaper to employ people.
Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

Financial chaos first, as the pound falls to reflect the weird limbo state of Britain. The medium term will almost certainly see low growth or a slump in Britain as firms relocate to the Continent and foreign investors stop using Britain as an English-speaking springboard for the EU. This sort of outcome is already predicted anyway, but crashing out will make it even worse.

The Financial Impact

John Kicklighter

John Kicklighter

Chief Currency Strategist, IG

Sterling would drop sharply. However, this would not be a surprise turn of events. It would become clear with each day that passes without a sound negotiation, that calamity will come closer and closer. There is a deadline well before the final date agreed by the UK and EU, whereby the latter feels they have enough time to consider the British proposals thoroughly and bring it to a vote. Furthermore, the loss of access to the single market – and with no comparable, alternative deal in place – will mean a significant diversion of capital from and through Europe into the UK. That translates to far less global bid for the pound. More likely than not, we would have a robust sterling bear trend develop for months before the Brexit Day.
Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

There would be a drop in the pound. Currencies tend to reflect nation’s well-being as a whole, and the market will strongly reject a crashing Brexit. Then will come the capital flight. This, to my mind, is the bigger question: just how much business will flee, or not come to Britain, due to Brexit? It’s not hard to predict that the more erratic and disorganised Brexit is, the worse the capital flight will be.

The Social Impact

Ben Page

Ben Page

CEO, Ipsos MORI

What’s interesting, when asking people ‘what should be top of your list of priorities when negotiating with Europeans?', is they continually say immigration. Even though the majority of immigration comes from outside of the EU, it’s still the top of their list of priorities. People are unlikely to change their mind.
Robert Kelly

Robert Kelly

Professor of Political Science and Diplomacy, Pusan National University

This would lead to the dislocation of EU nationals living in Britain. Their rights are guaranteed by the EU. Suddenly they would be in some weird limbo the world has never really seen before. Some of them might lose property. Families might be divided.
John Kicklighter

John Kicklighter

Finger pointing would increase significantly amid a clear economic and legal immigration fallout.

Find out about another risk facing the world in 2018 and beyond

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