The Impact of Brexit: London Faces Competition as a European Financial Hub

The financial district of London: This is the heart of the British economy. Then came Brexit – fear spread. Pessimists reckoned with the loss of over a quarter of a million jobs. But these bleak scenarios have not come true. The most recent surveys assume that around 7,000 people have migrated.

However, experts believe that other European cities are now more competitive than London in areas such as investment banking. David Henig, of the European Center for International Political Economy, believes: “London is still seen as a global financial player – but not necessarily as the only European financial services hub, and I think Brexit has changed that. Now people think that not only London is a European financial center but also other places. It could be Paris, Amsterdam or Dublin.”

London is under pressure: Other European cities like Dublin are stepping into the limelight – as new centers for banking. But what was once predicted to be a mass exodus of city bankers from London has in fact turned out to be a strategic reorientation of resources around European banking centers…to compete with London.

Peter Lawlor is the former Chief Economist of Deutsche Börse. He believes that European centers like Frankfurt were a step ahead of London. At the same time, it is too early to assess the long-term impact of Brexit on financial services:

“I don’t think the strategic thinking in the UK has been done right. Frankfurt was very interested, Paris was very interested. You know the incentives that have been put in place in various European cities. But where will it all ultimately lead? Whatever ‘ultimately’ means, it’s too early to tell.

The tide has turned, the balance of power has been rearranged – the story of the impact of Brexit on finance in Europe is far from over.

2023-08-22 23:21:14
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