Evaluating Brexit's Economic Impact: A Financial and Statistical Analysis of the UK's Economy

open_access
Open Access
Author:
Fallon, Carissa
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Qiang Bu, Thesis Supervisor
Gina Brelsford, Thesis Honors Advisor
David Lawrence Buehler, Faculty Reader
Keywords:
United Kingdom
European Union
Brexit
imports and exports
financial health
Abstract:
This thesis aims to determine if Brexit, the departure of the United Kingdom from the European Union, has a statistically significant impact on the United Kingdom’s economy. A review of existing literature is paired with financial ratio, correlation, and regression analyses to address the research question. The financial ratio analysis of four UK-based multinational corporations, Unilever, Reckitt Benckiser, British American Tobacco, and Imperial Brands, assesses corporate financial performance from 2014 to 2023, ultimately providing insight into broader economy trends. Additionally, the correlation and regression analyses assess key macroeconomic indicators, such as UK imports and exports, UK and EU interest rates, and currency exchange rates, between 2017 and 2022. The data is sourced from the Federal Reserve Economic Data and the International Monetary Fund’s Direction of Trade Statistics databases. The results of these analyses reveal noticeable changes in financial and economic trends post-Brexit; however, the statistical analysis does not confirm a significant causal relationship between Brexit and these fluctuations. The findings suggest that while Brexit may have influenced some financial patterns, other external forces likely played a larger role in shaping the overall United Kingdom economy after departing from the European Union.