Is Post-Brexit London Really Doomed?
Despite the likelihood of a harder-than-expected Brexit, and the certain loss of the so-called passport, which would allow financial services to be sold freely across the EU, the feared large-scale exodus of firms and financiers from London does not seem to be under way. Why?
EDINBURGH – It is now well over three years since the United Kingdom voted, by a narrow but significant margin, to leave the European Union. Yet we still have no idea what kind of economic relationship the UK will have with the 27 countries it leaves behind. (Some of the debate in London recalls in its insularity the apocryphal 1930s headline: “Fog in Channel: Continent Cut Off.”) Insofar as one can hazard a guess, the most likely outcome seems to be a more remote relationship than “Leave” supporters talked about in the referendum campaign and than most commentators envisaged shortly after the vote.
But, despite that change of direction, and the certain loss of the so-called passport, which would allow financial services to be sold freely across the EU, the feared large-scale exodus of firms and financiers from London does not seem to be under way. The French bakeries and German sausage shops are still doing a roaring trade. Why?
Two very recent pieces of evidence give a sense of what is happening on the ground, while politicians continue to argue. The accounting firm EY has monitored firms’ declared intentions in response to Brexit over the last three years. The latest survey, published in mid-September, indicates that 40% of firms plan to move some of their operations and staff out of London, while 60% of larger firms have announced such moves.
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