LONDON: Europe’s financial capital is feeling the coldness of Brexit but UK officials insist the City of London is suffering a temporary blip and is well placed to profit from a new trade horizon .
For the first time last month, as Britain pulled out of the EU in full force, London’s financial district lost its European trade crown to Amsterdam.
Researchers at IHS Markit described the recession as “a rather harsh Brexit,” and how the UK government has so far failed to force Brussels to give city-based companies full trading rights under a system known as “Equality.”
The volume of London’s daily trade in other areas such as derivatives and foreign exchange remains well above its European neighbors, and Catherine McGuinness, policy chair at the City of London Corp., played the development.
“We have always known that some businesses facing the EU would have to leave the City of London after Brexit, regardless of the shape of the treaty,” she said. “However, there are far fewer jobs moved from the city due to Brexit than expected, and we remain very optimistic about the future fundamental strengths of the City,” said McGuinness.
London is “continuing to go from strength to strength” in emerging financial technology (fintech) and technology investment, as well as green finance, she said.
In January, according to the Financial Times, Euronext Amsterdam traded an average of € 9.2 billion ($ 11.2 billion) daily shares along with two other Dutch stock markets.
That was more than four times their December figure, surpassing London ‘s daily average of 8.6 billion euros, the newspaper said.
A spokesman for the Dutch Financial Markets Authority told AFP it was not surprising.
“We think it’s a logical outcome because we already had a strong trade with the Euronext Amsterdam,” he said.
Financial services – the main driver of the British economy – were largely left out of the last-minute Brexit trade deal agreed between London and Brussels at the end of December.
Thus from 1 January, the British treasury lost access to the EU single market and its “European passport”, a means of selling UK financial products and services in the EU.
Both sides have instead worked to carve out an “equality” system under which each would recognize each other’s financial governance, and so far Brussels has allowed only two areas of trade. out of dozens that the City needs.
Anish Puaar, an analyst at Rosenblatt Securities, said London’s relative decline was “symbolic in the post-Brexit era.”
“But other than that the impact is very low,” he said on Twitter.