Brexit Continues To Decimate UK Economy

Brexit continues to decimate the UK economy, and its only going to get worse. UK exports to the EU fell by around 60% after the January start of Brexit. Britain has also lost its prime place when it comes to equity trading, with that now having moved to Amsterdam, with other losses to New York, and Tokyo. Now, latest data shows that London has lost £2.3 Trillion of its business in derivative swap trades, in March alone. London which previously accounted for about 40% of all such Euro-based trades, accounted for just 10% in March. The big winner was New York, along with EU based financial centres. Given the huge amount of foreign earnings that London's financial services industry brings into the country, required to pay for Britain's large value of imports, this spells looming problems for the UK. It means the trade deficit is set to balloon, at a time when Britain's borrowing is also ballooning, to cover its fiscal largesse, doled out to cover the self-inflicted damage caused by lockouts over the last year.

As London increasingly loses its lustre as a financial centre, the pace at which financial institutions abandon a sinking ship, and locate to EU countries will accelerate. The money drawn into London's financial districts is the motor that drives the London economy, and without which that economy, which is the most vibrant, productive and significant part of the British economy overall, will quickly begin to crumble. One of the first signs will be a quickening pace of the fall in London property prices, already on shaky ground, as Covid and lock-downs encouraged those with money to move out of cities and towns into rural areas. But, that quickly knocks on to the local economy, on to all of the small businesses that cater for that economy. But, in the same way that if the US sneezes the world catches a cold, if London sneezes the whole of Britain catches a cold.

The damage being done by Brexit to the economy has been hidden because of the media focus on COVID, and because government imposed lockouts have disguised the effect to which Brexit has decimated the economy. The damage has also been disguised because the effects of lockouts, in the EU, and the slow roll-out of vaccines, has meant that its economy has not rebounded yet, in the way it is doing in the US. That has impacted the Euro, enabling the Pound to appear superficially stronger than the fundamentals indicate it should be, as UK productivity continues to fall, its trade deficits grow like Topsy, and its borrowing and inflation starts to rise sharply leading inevitably to a rise in interest rates, in the near future.

The horrors of Brexit continue to develop, and will only get worse. Only a fool would now align themselves with Boris Johnson and his continued drive towards that Brexit disaster. Step forward Keir Starmer.