The primary objective of this paper is to highlight the need for the IOM Government to undertake a comprehensive risk assessment and create contingency plans due to the possible impacts of Brexit on the Island’s economy and government finances.
The UK economy has been in a strange and unexpected place since 23 June last year when the Brexit vote happened; it has held up better than expected and there was little negative impact on consumer confidence. There is a very good explanation for why this relatively rosy period of economic activity has been occurring - most ordinary consumers have not yet seen their personal circumstances change significantly due to Brexit and they have little capacity to realistically assess how Brexit will ultimately affect them.
No one yet knows what all the consequences of Brexit will be. It will take months and possibly years before the outcomes are fully understood. What we do know is that Brexit is an event of historical importance and that the UK is only at the beginning of what could become a tumultuous spell of unprecedented disruption to many aspects of modern British life and its institutions. In a worst-case scenario, if appropriate agreements with the EU are not satisfactorily completed within a prescribed two-year time frame, the UK could experience a world of self-inflicted economic pain and unpredictable political instability. The stakes could not be higher.