Boris Johnson’s Conservative Party scored a huge victory in the Dec. 12 U.K. election, giving the Tories 365 seats in the House of Commons and an unassailable 80-seat majority. It’s now nearly certain that the United Kingdom will be leaving the European Union in the very near future — the much dreaded and/or anticipated “Brexit.”

This will have consequences for the U.S. economy as well and, eventually, for your financial well-being. But will they be serious? The shortest answer is yes…and no. Here’s a rundown of the most likely Brexit consequences and how they may affect you.

A Shrinking British Economy

No one can say with complete accuracy what will happen next in a highly connected and almost indescribably complex world economy. Pundits can be wrong and often are. But it’s widely anticipated that Brexit will shrink the British economy by as much as 9%, although the consensus is for something less — possibly about 8% in the first year.

Still, that represents a serious recession. What makes this dire prediction quite believable is that just in anticipation of the possibility of Brexit, the British economy had already begun shrinking over the year and a half preceding the election, indeed at a rate not seen since the financial crisis in 2009.

When you think about how Brexit works — not all the gory details, but just the general idea of Great Britain’s leaving the common market of the European Union, it’s hard to see how it could be otherwise than very bad for the British economy.

Many European financial institutions had already begun an orderly withdrawal from their British headquarters in favor of Zurich and other European financial centers over the past two years; numerous European investments in Great Britain have also been put on hold. This exodus will now accelerate. The new customs routines required once the country is independent of the common market will inevitably be a strong drag on both European imports and British exports.

Not too much has been said about the brain drain aspects of all this, but the best and brightest European skilled workers, particularly in finance, will hardly be motivated by Brexit to leave Europe for a country where they have no guarantee of permanent residence, much less citizenship rights. In the 21st century, intellectual capital is also capital in the traditional sense; the anticipated brain drain will have significant economic consequences, especially the City of London — the English version of Wall Street.

While it’s beyond the scope of this overview to get into the political details, it should be noted that Brexit threatens the U.K. alliance itself, offering an occasion for Scottish Nationalists to finally get out of a partnership they’ve always distrusted and for Northern Ireland to escape the economic consequences of Brexit by separating from the U.K. and uniting with the Irish Republic — thus remaining in the EU.

If — as is possible — both Scotland and Northern Ireland leave, the economic consequences will be about as serious as serious gets. Imagine what would happen to the U.S. economy if, suddenly, the Western United States, the Eastern Seaboard and the South were three separate countries, each with its own customs requirements?

How a British Recession Might Affect the U.S.

The EU has been the U.K.’s biggest trading partner by far, allowing for 44% of all British exports. One of the most important reasons for a European Union in the first place was to enhance trade.

Exiting the European Union will reduce this trade, especially hurting the U.K., the smaller of the two soon-to-be-former trading partners. A recession reduces the buying power of every British household, thereby reducing the amount of U.S. goods and services they consume. That’s obvious, but by how much?

Trade is an important part of our growth and represents about 60% of domestic product. But while our economy is very dependent on trade, it turns out the U.K. is not our biggest trading partner (that’s Canada, followed by Mexico, China and Japan), accounting for only a little over 2% of our total exports. It seems reasonable to assume that a British Brexit-provoked recession in terms of trade consequences will be relatively slight

Interest Rate Consequences Could Make It Worse

Writing for British newspaper The Independent, Sean O’Grady uses Donald Rumsfeld’s famous remark to point out that there are things about Brexit consequences that we don’t yet know we don’t know — the “unknown unknowns.”

One of them is what may happen to interest rates. If a Brexit induced British recession is very bad — and 8% is a very bad recession — the British pound will seriously weaken. This, in turn, will make U.S. goods very expensive, with obvious U.S. export consequences, but will also make British goods in the U.S. unprecedentedly cheap. This could put a lot of pressure on profit margins of U.S. companies forced to compete.

The worst thing about interest rate consequences is that they can spiral out of control. Here’s an example: if cheap British goods pressure U.S. companies to lower profit margins, weaker companies may fail, stressing U.S. banks who’ve lent to those companies and putting U.S. workers out of work.

Lehman Brothers-like institutional collapses could make things suddenly much worse. As the economy weakens, it may eventually provoke a new recession.

At worst, that recession could be particularly acute because the reality is that certain segments of the U.S. economy are still suffering from the last one. A 2017 study revealed that 3 out of 10 Americans were still recovering from the Great Recession of 2007 to 2009.