Well, well, well! Here we are, ladies and gentlemen, diving into the deep end of the Brexit pool — and boy, is it murky! Our good pal City of London defies Brexit: A financial district on the rise – InvestmentWeek”>Michael Mainelli, the Lord Mayor of the City of London, has dubbed Brexit a “disaster.” I mean, that’s like calling the Titanic a bad day at sea.
Now, Mainelli, who apparently holds a title that sounds like a character from a Dickens novel — the 695th Lord Mayor no less! — has been ringing the alarm bell about job losses in London’s financial district. A staggering 40,000 jobs vanished into thin air since the Brexit referendum. It’s like watching a magician perform a vanishing act, except instead of a rabbit, it’s your mate from the pub!
He’s painted quite the picture of the City of London, the “Square Mile,” where all these financial institutions rub elbows. We’ve got the Bank of England, Lloyd’s of London, and a plethora of international banks. You’d think they’d be throwing money around like it’s confetti! But alas, the magic has worn off, and what do we see? A loss of workforce and a potential drop in productivity by 4%, according to the Office for Budget Responsibility. They should really consider rebranding to the Office for Broken Dreams!
Mainelli’s reflections bear weight, considering the City voted 70-30 to remain in the EU. That’s a convincing result! It’s like a football match where one team just thrashes the other. Imagine Liverpool getting soundly beaten by a Sunday league team and then having to play under a new set of rules that the Sunday league themselves don’t fully understand! Chaos!
Now, let’s talk trade agreements! Our Brexit cheerleaders have been waving flags about new deals, like the one with Japan — a treaty that mainly duplicates existing arrangements. They’ve lured us in with promises of GDP growth that is about as exciting as watching paint dry. “Hey! We could boost our GDP by a whole 0.1% over the next 15 years!” Sound the trumpets! We’re gonna be rolling in it, folks!
And then there’s the Australia deal, which is stirring up enough controversy to make a reality TV show. They’re arguing about animal welfare standards as if we’re trying to unite the forces of “The Good Place” with “Survivor.” Meanwhile, farmers are lobbying for protection against those pesky Aussie lamb chops!
Let’s shift our gaze to the shiny new Labour government that’s promised a “reset” of relations with the EU, which sounds nice, but so far it’s all been talk and no action. It reminds me of someone promising gains at the gym but only lifting a beer instead.
In conclusion, Mainelli and the rest of the financial wizards are warning us about the long-term implications of Brexit, especially for financial services. The economic landscape might resemble an abandoned theme park — with plenty of rides that are stuck in position.
So here we stand, debating the long-lasting effects of Brexit while the City grapples with a challenge that feels like a merry-go-round. Hold onto your hats, folks! The debate is bound to spin wildly as we grapple with the aftermath of this “adventure.” Just remember, after every storm, someone’s got to repair the roof — let’s just hope it’s not too costly!
The Lord Mayor of the City of London, Michael Mainelli, has described the UK’s decision to leave the European Union as a “disaster” that has resulted in the loss of tens of thousands of jobs in London’s financial district. Mainelli, who represents one of the world’s most influential financial centres, noted that approximately 40,000 jobs have disappeared in the City since the Brexit referendum in 2016.
In an interview with Reuters, Mainelli, who holds the title of 695th Lord Mayor, laid out the devastating impact of the UK’s exit from one of the world’s most powerful trading blocs. The City of London, known as the “Square Mile”, is home to renowned financial institutions such as the Bank of England, Lloyd’s of London, and numerous international banks, law firms and insurance companies.
“In 2016 we had 525,000 workers, my estimate is that we lost just under 40,000. There are now some 615,000 jobs in the City, driven by the expansion of the insurance and data industries,” Mainelli commented, highlighting that despite initial losses, some sectors have managed to offset some of the losses.
A pro-EU City
Mainelli recalled that the City of London, for the most part, opposed Brexit during the referendum. “The City voted 70-30 to stay. “We didn’t want to go out,” the Lord Mayor said. His statements reignite the debate about the true impact that Brexit has had on the British financial sector, which has traditionally been one of the country’s largest sources of income.
Long-term productivity at risk
The latest analysis from the UK Office for Budget Responsibility (OBR), published in May 2024, supports concerns about the negative effects of Brexit. According to the OBR report, Brexit will reduce the UK’s long-term productivity by 4%, compared to remaining in the EU. Furthermore, both imports and exports will be reduced by approximately 15% in the long term, seriously affecting the country’s trade.
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The report also downplays the impact of non-EU trade deals, noting that the new alliances have not produced significant benefits so far. According to the OBR, many of these agreements simply replicate those that already existed when the UK was part of the EU.
The trade agreement with Japan, a limited example
A clear example of the limits of post-Brexit agreements is the trade agreement signed between the United Kingdom and Japan, known as the “Comprehensive Economic Partnership Agreement.” Although the British government presented it as a great achievement, the OBR indicated that this pact largely replicates the agreement that Japan signed with the EU in 2019.
The British government’s analysis suggested that the deal with Japan could increase UK GDP by 0.1% over the next 15 years, but the OBR warned that this increase is relative to no deal. In other words, if the UK had remained in the EU, it would have continued to benefit from the already existing treaty between the EU and Japan.
Controversies over trade agreements with other countries
Another post-Brexit trade agreement that has generated controversy is the treaty signed with Australia, the first to be negotiated with a country that does not have a similar agreement with the EU. However, this pact faces a legal challenge from campaign groups who claim that looser rules on animal welfare and environmental standards in Australia could harm British farmers. The deal, which the UK government estimates will increase GDP by 0.1% over the next 15 years, is under judicial review due to concerns that Australian beef, lamb and dairy producers could compete too disloyal to the British.
The future of relations with the EU
The United Kingdom’s new Labor government, which recently took power, has promised to “reset” the country’s relationship with the European Union. However, so far, no concrete details have been revealed about what this new post-Brexit arrangement will look like.
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Mainelli and other financial sector leaders continue to warn of the consequences of leaving the EU, especially in sectors such as financial services that, until before Brexit, enjoyed a fluid and beneficial relationship with European markets. Meanwhile, the debate over the long-term effects of Brexit on the British economy remains a hot topic both inside and outside the City of London.
