Boris Johnson

Boris Johnson was already a beloved figure in the UK as the former London Mayor, so analysts predicted that his choice would be of great use for any side of the conflict. In February 2016, he took a so-called political gamble by waiting to announce his political stance in the conflict. Eventually, he wrote a column in the conservative newspaper The Telegraph endorsing the Leave campaign and Brexit. And as I said previously, many now and then after the conflict was over and the UK departed from the EU many political analysts suggest that without the help from Boris Johnson the outcome would have been totally different. Many say that his decision to participate in the Leave campaign is what made Brexit so “Mainstream”. “Get Brexit Done” is the mantra that got Boris Johnson the win in the general elections in 2019 and not only that, he got a 80-seat majority helping him put an end to the parliamentary deadlock back then. The mantra was so simple that it resonated with the public exhaustion from the legal complications the UK was facing with the negotiations for withdrawal from the EU helping Brexit and Boris Johnson to solidify their position in the UK parliament and political system. One of his most vital renegotiating deals with the EU is the removal of the “Irish Backstop’’ from the original treaty. He stated that it was a national humiliation as it would have kept the UK tied to the EU and its rules indefinitely. He opted for the “Northern Ireland Protocol’’ which moved the trade border to the Irish Sea, which allowed the rest of the UK to legally depart from the EU. The Trade & Cooperation Agreement (TCA) was the largest bilateral trade deal in the  world, finalised on Christmas Eve 2020 by Boris Johnson. He portrayed it as a major victory for the Brits and for their sovereignty, claiming that the UK had taken back control of the UK’s law, borders, money and fish. Despite the so-called victory the TCA left a significant amount of new paperwork and barriers for British businesses. ​

Nigel Farage

Nigel Farage or commonly known in the political world as the “Godfather of Brexit” was the leader of the UK’s Independence Party. His rapid rise in popularity in the early 2010s was a threat to the Conservative Party by potentially “stealing” millions of their voters. This particular political pressure was what eventually forced the leader of the Conservative Party, David Cameron, who was against the UK’s departure from the EU to request a referendum which he ultimately lost in 2016. Nigel Farage decided to not be involved in Boris Johnson’s campaign for the departure of the UK from the EU, instead he decided to start his own political campaign, "Leave.EU" that solely focused on immigration and preservation of the national identity rather than economics and politics which was the focus of the official campaign Vote Leave. With Leave.EU Farage succeeded in establishing a connection with the working class that during that time felt ignored by the UK’s main political parties. One of the most controversial moments in the whole  Brexit situation including Farage was the "Breaking Point"  poster. Because of the poster that showed long lines of migrants Nigel Farage was accused of xenophobia and while it was not only from critics but also from fellow Brexiteers, Farage argued back stating that it was a humanitarian warning about the pressure on UK’s public services like school and NHS. The official Brexit party which is now called Reform UK was created by Farage during the 2019 General election. That way he ensured that Johnson followed his promises and by withdrawing his candidates from 317 seats Farage successfully helped the Leave campaign and Boris Johnson to get a majority and finally pass the Brexit laws that eventually helped the UK depart from the EU. ​

​Michael Gove

While others opted for catchy mantras, posters and slogans Gove decided to follow the more intellectual route by writing long essays or explanations to those problems, perhaps to reach the upper class as they would be hardly provoked by those catchy posters by Farage or Johnson. His most viral and most recognisable essay is his 1500 word essay declaring his stance on the issue ("Why I am voting Leave" essay by Michael Gove). He firmly believed that the UK would be more free, fair and better off without the EU and its institutions. One of his most famous sayings is the “People in this country have had enough of experts” and that was said at the time when a lot of economic experts suggested that the UK’s departure would be a major disaster and the UK would face a major blow in their economy. With his saying Gove advocated for relying on common sense rather than the famous global institutions. ​ One thing I failed to mention earlier was that Gove was more of a behind the scenes player just like Dominic Cummings they were both the intellectual powerhouse that Brexit needed to convince the UK that the EU was pulling Britain back and that they should depart immediately. Gove was the so-called bridge between the radical campaign ideas and the traditional ones of the Conservative Party. Despite this role he played another one as the leader of “Operation Yellowhammer”. In case that there were no trade deals made with the EU after the UK’s departure he would be responsible for making sure that the UK and its citizens would not be left without food or medicine during the transition period. Fortunately for him and the Leave campaign a deal was made, the TCA the first deal made with the EU where there would be no tariffs on 100% goods, but despite the no tariffs companies were left with enormous piles of paperwork. ​

Dominig Cummings

Much like Gove, Cummings plays a rather behind the scenes role and a major part in the intellectual powerhouse behind Brexit. While Gove’s approach was more sophisticated with longer explanations Cummings used three words, three words that triggered a psychological effect called loss aversion. You see, he created the slogan “Take Back Control” that way he made sure that people would think they lost something in the first place so they need to take it back and in this case it is the UK’s sovereignty and the slogan suggests that the EU stole it. With this slogan voters started to feel as if they were reclaiming their national sovereignty.   Cummings was not a believer of the idea that TV and newspaper advertising is effective enough, so instead he opted for Facebook ads, so many ads that he spent 98% of the campaign’s advertising budget on digital advertising. This way he reached people who didn’t usually vote but were persuadable on specific issues, that way he used micro-targeting to pursue a great number of voters. One of his wildest and most controversial claims was that the UK weekly spent 350 million British pounds to the EU, which could be used for the NHS instead. The thing that made this claim so popular was the fact that he put it on a giant red bus. Many proved the inaccuracy of his ‘absurd’ claim, but he never backed down and continued to use it so that there was focus on the high cost of an EU membership. Unlike Gove, Cummings was quite radical in his claims. He often addressed civil servants and teachers as ‘The Blob’ as he believed they slowed everything down and he once addressed the pro-EU MPs as ‘useful idiots’. That way he causes disturbance in the British governing system so that Brexit can be viewed as a way to hack a failing political structure. ​ After the win in the referendum, he became Boris Johnson’s top adviser at the iconic 10 Downing Street, where he made sure that the government followed the desired Hard Brexit path. Many journalists marked his time there as ‘The battle at 10 Downing Street’. That way Cummings established himself as the enforcer of Brexit. He parted ways with Brexit in 2020, but not before he helped secure the massive election victory that finalised the UK’s departure from the EU.

​David Cameron

Everything began with David Cameron as he took a political gamble and decided to call the referendum as he firmly believed that the UK should become and established leader in the EU and the predicted by him victory in the referendum would unite his party but due to his lack of connection with the public and the lack of interest that was paid to his campaign ‘Establishment’ that was also called Project Fear ultimately led to his fall. He lost the referendum which led to his resignation that paved the way for Brexit, Johnson and Cummings and their more radical leadership at 10 Downing Street. Everything began with David Cameron as he took a political gamble and decided to call the referendum as he firmly believed that a victory at the referendum would not only solidify UK’s position in the EU and would also unite the party and nation. Unfortunately for him, his campaign ‘Remain’ also commonly known as ‘Project Fear’ failed to resonate with the public which resulted in a close loss over the ‘Leave’ campaign by a few percent. The devastating loss resulted in his resignation as Prime Minister and that way he paved the way for the more radical leadership of Boris Johnson and Dominic Cummings in 10 Downing Street. ​

The fall of the Pound

One thing that investors could not predict was the fall of ‘Remain’, the vast majority of investors back in 2016 predicted that at the referendum it would be voted that the UK would not leave the EU and that ‘Remain’ would win. Unfortunately for them the exact opposite happened and ‘Leave’ won. In the fear that the UK would lose access to the European Single Market the British Pound dropped 10% in one night. That day marked a  new beginning in UK’s history as on that day the Pound reached its 31 year low, below the value of the infamous ‘Black Wednesday’ of 1992. This was not an accidental currency dip that would regain its 10 lost percent but it was a reaction to a certain legal uncertainty regarding the UK’s trading and legal framework.  "The oversight of the UK’s financial system is now in our hands... but a period of uncertainty and adjustment will follow."  Mark Carney (Governor during referendum) immediately after referendum "Brexit has led to a reduction in the openness of the UK economy... which has implications for the currency's value in the long term." Andrew Bailey (current Governor) shows that the relation with EU changed fundamentally ​ The fear of No-Deal was one of the main reasons why the Pound and the UK’s economy took this big blow. During the years of parliamentary deadlock there was this constant fear that the departure would happen without a trade deal and actually every time, when rumoured negotiations stalled the Pound fell. No deal meant imposing WTO tariffs and severe non-tariff barriers, which would have led to countless and immediate tariffs and a lot of border chaos. As the UK parted ways with the EU they lost contact to the European Single Market which eventually forced banks to move their assets to other global financial hubs instead of London like Paris, Frankfurt or Dublin in order for them to be able to operate in the Eurozone.Analysts estimated that the moved assets were in the midst of 1 trillion pounds which reduced the global demand for Pounds making them weaker and reducing London’s dominance over the financial world. This was part of the ‘Project Fear’ predictions that were eventually dismissed by ‘Leave’ and Michael Gove and while the dismissal made by ‘Leave’ regarding the economy collapsing immediately after the departure was correct, pro-EU experts were correct when they predicted major structural shifts in the British economy and financial sector. One pretty ‘bold’ move that Brexit did was abolishing the 45% Top Rate of Income Tax back in 2022. Their view was to promote competitiveness in the business area and to return London to its previous glory as a financial powerhouse. The massive problem that the UK encountered by lowering taxes so much was the incoming debt that they were about to face. Many investors believed that they would not be able to pay this massive debt that they were getting into therefore the pound plummeted again, but this time to 1.08 USD, the lowest point of the British Pound since 1985. ​There were many promises made by the government like a plan to help citizens fund energy bills but also lower the taxes, so they were losing money, but still decided to spend more? Truss and Kwateng refused a report made from the OBR to see the flaws in the budget and there were many. As a result of this absurd behaviour, many investors got frightened and that was the main reason why the economy experienced such a hit, if it was up to me I would call it more of a knock down from which they are still getting up. The massive tax cuts (45 billion pounds ANNUALLY to be exact) plus the energy price guarantee they offered (100-150 billion for two years) build up to the national debt which was already massive as of the COVID-19 pandemic which resulted in 98% Debt-GDP ratio, which meant that their debt was almost the same as their annual income. Because of this debt the interest rate of Gilts (bonds) jumped from 3.5% to 5% which resulted in billions of pounds added to the UK’s annual interest payment making the debt unsustainable. Then the Bank of England stepped in with 65 billion pounds to stop the pension funds from collapsing. All those promises resulted in a massive U-turn made by Jeremy Hunt who was appointed to get them out of that rabbit hole they had gotten themself into. Remember Michael Gove and his comments regarding the need of experts? Well, that backfired as exactly the experts at OBR which Hunt returned in order to check the math, so that investors were assured that the government were fully using their resources rather than blindly guessing. Hunt also completely disregarded the promises made by Truss and cancelled the tax reduction. Once Rishi Sunak was appointed as prime minister he and Hunt did the only thing that could save the economy.They made cuts in public services worth 30 billion pounds, they announced 25 billion pounds in tax increases. Their goal was simple, LOWER the percentage of Debt-GDP ratio. In the end those ‘great’ post-Brexit economic policies only harmed the people. Despite the fact that they were struggling the Pound got back from nearly 1 USD to 1.20 USD within weeks. Now the UK is experiencing its highest tax burden since WW2. ​

Rise of the Pound

After Boris Johnson won the general election and got a 80-seat majority making his and the policies of ‘Leave’ achievable as there was no more parliamentary deadlock, everybody as well as investors knew what was going to happen as Johnson held the parliament in his right hand and under Johnson a ‘No-deal’ departure was unlikely to happen. Because of this many investors could have easily predicted future campaigns so that the Pound would not decrease its value and actually at the night of the election in 2019 the Pound rose to its highest point in 3 years showing that the 80-seat majority that ended the long parliamentary deadlock was worth it. ​ On Christmas Eve 2020 something happened, something that solidified the Pound as a currency. On that day a deal was made the Trade and Cooperation Agreement (TCA) which helped the UK trade with the EU without tariffs and not follow WTO’s stricter trade rules. This way they proved that despite the departure they would still maintain a friendly relationship. This deal gave investors the comfortability to buy Pounds again which was a reason for the Pound to rise again. As the UK was no longer tied to the European Central Bank, the Bank of England was able to raise interest rates rapidly and more aggressively to fight inflation. With higher interest rates foreign investors often get attracted and begin working with the Bank of England to get better returns on their investments, which pushes the value of the Pound up.