There was a lot of Hubris around before and after the 2016 referendum as we know, and nowhere has been damaged more by it than The City of London, the UK’s beating financial heart. It was thought to be so big and powerful as to be impregnable to the impact of leaving the EU. That idea is looking increasingly doubtful as time has gone on. I seem to recall many Brexiteers being relieved that the immediate impact was 'only' the loss of 7,000 jobs and £1 trillion in assets. Sadiq Khan, London’s anti-Brexit mayor commissioned a report recently showing London is losing £30bn a year from its economy.
No doubt we will soon be told that £30bn a year is actually a bargain or that we're lucky it's not worse.
A few days ago there was a report in efinancialcareers that the number of 'newly open' banking jobs in London has dropped by 79% since 2015. The figures come from recruitment firm Morgan McKinley which estimates that "newly open banking jobs in London fell from a peak of 108,000 in 2015 to just 23,000 last year."
Morgan McKinley also estimates that the number of jobseekers went from 94k in 2022 to 79k in 2023.
The Telegraph has a report on their financial pages headed: How Brexit Became Prime Suspect in the Death of the stock market. The article claims the London stock market "is rapidly losing its status as a global centre for raising new capital." The Telegraph!
The LSE has just seen its quietest year since 2010, according to global accountants EY, while investors have continued to remove billions from UK equity funds. You might find it surprising that the single US tech business Apple is worth £2.3 trillion, more than the entire British stock market.
This comes after the French finance minister Bruno Le Maire warned Britain that France will look to “take advantage of Brexit” and lure finance firms away from London. In a New Year address, he said his government is going to put forward proposals to tempt companies to Paris. Mr Le Maire said they had already attracted some of the world's biggest financial establishments adding: “To strengthen this position, a bill on financial attractiveness will be presented to parliament in spring.”
Last year the EU confirmed that the decision to grant London temporary "equivalence" on euro clearing will not be extended beyond June 2025. Clearing is the lucrative business of settling international contracts with money being deposited by the buyer and held until goods are delivered when it's transferred to the seller.
London handles more than €130tn (this is not a typo, we are talking of €130 TRILLION) every year in euro-denominated trades, scraping commission from every deal. It's money for old rope. The UK government is said to "privately believe" that the EU commission will have to delay the date by several years “out of self-interest” because allowing the current equivalence deal to expire could create “financial stability risk” for the continent.
This just looks like more hubris to me.
When Brexit happened it was always obvious that the EU would become a competitor, indeed for many Brexiteers and nationalists this was the whole purpose of Brexit. They thought Britain would perform far better outside the bloc than in it and openly talked about being 'more nimble' with 'light-touch' regulation and low taxes to steal a march on Europe.
One of the most important lessons I learned in selling is never to underestimate your competitors. Two of the things that have caused immeasurable damage to this country over decades are incompetence and complacency. There is the stupid belief that your opponent is somehow sitting idly by and doing nothing to develop their own range of products while you are managing OK or even winning orders.
They don't stand still. They are always planning for the future, to win business you have always regarded as your own. It's only when you see valued customers that you've had for years and decades shifting their business to a competitor that you realise you are slipping behind, but it's too late then.
So, I fear it will be in The City. It is being demolished brick by brick as we look on.
