(Photo: CGTN)

June in the UK is temperate, even though it is summer. In fact, Britain is typically wet in June. Two years ago, however, global attention was set on Great Britain and Northern Ireland. Despite the weather, people queued to vote for their future. Across the country, from London to Edinburgh and from Cardiff to Belfast, they queued to vote, which would not just determine the UK's future, but also exert a long-term impact on the whole world. At the same time, then Prime Minister David Cameron, was pacing in his office in 10 Downing Street, anxiously awaiting the result of the referendum. He may have realized that he had opened a Pandora's Box.

Two years have now passed and the UK is stuck in tough negotiations with the EU after the decision to leave. Ironically, before the UK's official divorce from the EU, David Cameron, in some ways the architect of Brexit, left 10 Downing Street just after the referendum. His political legacy to his successor, Theresa May, was nothing but an unfinished plan to leave the EU.

According to Prof. Portes, although Brexit’s impact on the UK economy, in the short-term, is unknown, the long-term effects will be largely negative.

Short-term impact is uncertain

Talking to CGTN, Prof. Portes indicated that the short-term impacts of Brexit on the EU will depend on UK politics and how Britain’s political class negotiates the exit. If the UK fails to reach an agreement with the EU or they negotiate a “hard Brexit,” then there will definitely be a blow to the UK economy in the short-term. However, Prof. Portes also thinks that a “soft Brexit” would be welcomed by businesses and markets and may provide relief from any significant short-term damage.

Long-term impact is negative

As for its long-term impacts on the economy, however, Prof. Portes holds firm to the belief that Brexit, “hard” or “soft,” will lead to a serious economic recession in the UK and financially disadvantage the British public. The first casualties will be people living in former manufacturing areas, many of whom actually voted to leave the EU. Prof. Portes' opinion is backed up by serious work in this field. According to a PwC, one of the largest consultancy firms in the world, "leaving the EU could mean that total UK GDP in 2030 would be around 1.2 percent to 3.5 percent lower than if the UK remains in the EU, primarily due to the uncertainty which dampens confidence and investment."

In Prof. Portes' opinion, the main impact of Brexit on the UK economy is the reduced trade opportunities with its traditional trade partners inside the EU, rather than an exodus of international firms currently based predominantly around London as a result of a lack of confidence toward the UK economy after Brexit.

Prof. Portes points out that although Brexit may have some negative effects on the UK's finances due to the possible moving of many banks and other firms to Continental Europe, "London will continue to be Europe’s leading financial center for the foreseeable future."

What the regulatory environment will be after Brexit is still uncertain, but the UK government has promised the financial sector a “transition period.” This has limited the number of jobs that have moved from the UK so far.

Manufacturing areas are victims 

The manufacturing industry, however, will be the main victim of Brexit, and ironically people who are engaged in the manufacturing industry are those who disproportionately voted to leave two years ago.

North East England, once a UK manufacturing hub, was one of the most pro-Leave regions in the June 2016 referendum, with 58 percent opting out of the EU versus 42 percent who wanted to stay in.

So what did the people who voted to leave the EU actually want to achieve and have they achieved their goals?

It has been two years but people who voted leave have yet to see benefits. Increased inflation and reduced wages have been the short-term fallout, and although the drop in sterling did give the manufacturing sector a boost, the UK has underperformed against the rest of Europe. Opportunities will come after Brexit with expanding trade relations but this will unlikely outweigh the damage caused by reduced trade with the EU.

According to Prof. Portes, the UK’s major economic problems are poor productivity and underinvestment. Many of the areas in Britain that suffer the most from these issues voted for Brexit – so will Brexit solve these problems?

Prof. Portes thinks it's unfair to attribute membership of the EU as being the cause of these problems and so leaving it will not solve them. Instead, the manufacturing sector is more dependent on EU trade than London, so it will suffer more from negative effects caused by Brexit. Thus, leaving the EU can't rescue these sectors' ailing economies, but exacerbates the local poverty in the long run.