Extent of Brexit Impact on City of London Revealed – Other Media news – Tasnim News Agency
The aftermath of Brexit has been a significant subject of discussion, especially considering its substantial impact on the City of London. Michael Mainelli recently described Brexit as a “disaster,” and his remarks encapsulate the challenges faced by this iconic financial hub.
Back in 2016, British voters chose to leave the European Union by a narrow margin of 52% to 48%. The separation was concluded in January 2020, marking a shift in economic dynamics for the UK.
In recent assessments, notable economists have suggested that the UK’s departure from the EU has cost the nation about 5% of real GDP in comparison to its economic counterparts. This outcome has been characterized by a sluggish economy and escalating living expenses, exacerbated by diminished trade and a loss of business investments.
A notable statement from Mainelli revealed: “We had 525,000 workers in 2016. My estimate is that we lost just short of 40,000.” This significant reduction exemplifies the challenges Brexit has imposed on human resources within the financial sector.
The City of London, renowned as a global financial hub, has seen its European rivals Dublin, Milan, Paris, and Amsterdam reaping benefits from the departure of financial entities from the UK. The city’s vote during the 2016 referendum also reflected its position; it largely favored remaining in the EU, voting 70-30 against leaving.
In a bid to mitigate the fallout, efforts have been amplified to foster stronger ties with EU member states. This year alone, there have been nine visits to various European capitals to strengthen collaborations. Additionally, negotiations for a bilateral trade deal with Germany are underway.
As part of its strategic response, the City has also begun diversifying into areas like data analysis and insurance. This approach aims to recuperate the employment losses experienced due to Brexit. According to a study by the consultancy firm EY, over 7,000 finance jobs have relocated from the City of London to the EU since 2016, highlighting the need for such diversification.
The financial sector is not the only domain feeling Brexit’s repercussions. The broader UK economy has also been adversely affected. In July, the Labor chancellor of the exchequer, Rachel Reeves, remarked that the nation was experiencing its most severe economic downturn since the aftermath of the Second World War.
Public sentiment also mirrors these economic challenges. A YouGov poll revealed that approximately 59% of those surveyed would support rejoining the EU if a referendum were held again.
Despite growing public desire to reconnect with the EU, the Labor Party’s overwhelming victory in the general election of early July signaled a continuation of the current trajectory. The new prime minister, Keir Starmer, affirmed that the government has no plans to reintegrate the UK into the EU, its single market, or the customs union.
The extent of Brexit’s impact on the City of London and the UK as a whole continues to be a subject of profound concern and strategic recalibration, as leaders and policymakers navigate these transformative times.
