UK post-Brexit; The Service Economy Fallacy

Abstract: In June 2016, UK chose to terminate the EU membership. The negotiation period for the exit (Brexit) has started at a time the UK economy has become increasingly dependent on the service sector as the main engine of job generation and a source of export demand. The purpose of this study is to give an overview of how Brexit possibly influences the service economy within the UK. The empiric data is collected from recent journal articles exposing issues regarding the service economy fallacies reasoned for regarding distribution of goods, user-financed services and tax-financed services. Findings revealed that a termination of the EU membership has led to market consternation and dramatic drop in the British Pound Sterling, which may affect the production costs, the wages, and the international trade that may lead to the fact that the competitiveness of the UK's service economy may be weaken. Besides, the sustainability of the pension system may be negatively affected due to the decreased immigration from other EU member states. Also, there is a need to reconstruction of the security and defence policies, which on the other hand may meet obstacles to remain the cost-efficiency.