In a political conundrum, transport is the first to feel the pangs of new policies. As UK Prime Minister Theresa May signs a letter requesting the United Kingdom's exit from the European Union last week, statements from different organizations believe gas prices, car and car insurance prices, and more could increase and fluctuate until the UK attains complete Brexit from Europe.
According to The Sun UK, the Automobile Association (AA) believes UK drivers will face higher insurance premiums as UK car laws would abandon EU car laws integrated with the country. It estimates UK citizens would need to procure another car insurance when driving abroad instead of a single car insurance usable in any European state before Brexit.
According to The Independent UK, British travelers by car could face more "red tape" journeying into European countries. Germany now requires foreign travelers to buy a pass to use the autobahn network. While not directly connected to Brexit, Germany's foreign driver option for driving on toll-free, unlimited-speed motorways is also about to end.
The Society of Motor Manufacturers and Traders find that the UK's car industry could adopt the World Trade Organization's tariff of 10 percent per car brought in and sold in European countries once it abandons EU policies on international exports. The UK's manufacturers could pay billions of pounds to sell their vehicles and sell these vehicles at higher prices abroad too.
Some analysts believe the possibly inflating value of cars and car insurance in the future is not likely because of new policies but due to the weakening pound. The market had mixed reactions regarding the signing and sending of UK Prime Minister Theresa May's letter to initiate Article 50 that would set things in motion for the UK's exit from the EU.
Despite being only a quarter away from becoming equal to the US dollar, the pound sterling is still a stronger currency than the euro. Economic analysts are still positive the pound could improve in 2017. According to The Telegraph UK, citing studies by Oxford Economics, the pound's true value could only be seen in "a wide range of valuation metrics." The pound only lost its value against the dollar and the euro during the 2008 Financial Crisis and during a bailout in the 1970s.
The weaker pound had allowed foreign nationals to afford better UK travels and tourism. UK exporters have also found their profits rise with more countries able to buy UK goods. However, the new policies also threaten this particular market and could only stabilize the Brexit deal between the UK and EU is sealed.
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