Since the UK decided to leave the European Union (EU) in 2016, the City of London, known for its rich history and financial power, has faced a serious job crisis. According to the mayor of the City, Michael Mainelli, around 40,000 jobs have disappeared since the Brexit decision. He described Brexit as a “disaster” for the city.
Back in 2016, British voters narrowly chose to leave the EU, with 52% voting for the exit and 48% wanting to stay. The official departure was finalized in January 2020. Since then, experts have been assessing the economic fallout. For instance, a report from Bloomberg, using insights from economists at Goldman Sachs, estimated that the UK’s economy is now about 5% smaller than it would have been if it had remained in the EU. This has led to a sluggish economy and rising living costs, mainly due to reduced trade and less business investment.
Michael Mainelli shared some alarming statistics: “We had 525,000 workers in 2016, but my estimate is that we lost just short of 40,000.” The City of London, although a small part of Greater London, is crucial to global finance. Many financial institutions that used to operate from London have moved to other cities like Dublin, Milan, Paris, and Amsterdam, which have become more appealing post-Brexit.
Interestingly, Mainelli revealed that the majority of people in the City voted to remain in the EU—70% wanted to stay. He mentioned, “We did not want it.” To counter the losses, he has been working hard to improve connections with EU countries, making nine visits this year alone. One of his goals is to establish a bilateral trade deal with Germany, which could help restore some of the lost economic ties.
In the wake of Brexit, the City of London is trying to adapt by focusing on new industries like data analysis and insurance. These efforts aim to create new job opportunities to replace those that have vanished due to the changes in the financial landscape.
A consultancy firm, EY, reported back in March 2022 that over 7,000 finance jobs had already relocated from London to various cities in the EU since 2016. The repercussions of Brexit are not just hitting the City; they are affecting the UK economy as a whole. In July, Rachel Reeves, the newly appointed Labour Chancellor of the Exchequer, claimed that the UK is in its worst economic state since World War II.
Interestingly, a poll by YouGov revealed that about 59% of people in the UK would vote to return to the EU if given a chance in a new referendum. Despite this sentiment, the new Labour Prime Minister, Keir Starmer, has made it clear that his government does not intend to bring the UK back into the EU or its trading systems.
The City of London’s journey after Brexit raises significant questions about the future of its financial district and the broader UK economy. As challenges mount, the push for new opportunities and stronger ties with the EU continues to unfold. The fate of one of the world’s leading financial hubs hangs in the balance as it adapts to an uncertain economic landscape.
