What you need to know
London is home to a plethora of international businesses, alongside many British ones that also have expanded overseas. This is part of what has led to the UK’s capital to have such a booming economy and become one of the financial capitals of the world. However, with Brexit negotiations now ongoing and a lot of change set for the country when it leaves the EU, London businesses with connections overseas will be greatly affected.
The Banking Sector
London is often referred to as the financial capital of the world, such is the size and power of its banking and financial sector. As soon as the Brexit referendum result was in though, warnings were already coming out about how many international banks and financial companies with bases in the capital may move their business elsewhere.
In early 2017 the chief executive of the London Stock Exchange (LSE) claimed that up to 230,000 jobs in the City of London could gowithout a clear plan in place for after Brexit. Other European cities such as Paris and Frankfurt are believed to be the destinations for many banks and financial institutions that may relocate their staff.
For British companies in London that have bases overseas or regularly export goods to clients and customers abroad, Brexit has already had an impact. The significant drop in the pound’s value has made exporting (and most other things) a lot more expensive, meaning many London businesses will have had to reassess their budgets.
Shipping companies such as Parcel2Go do offer cheap international courier services to help make deliveries a lot more affordable. However, unless the pound ensures some level of stability and dramatically recovers, then the costs for London businesses shipping goods to clients, customers and other businesses look to remain high.
Workers from Europe
Research from Centre for London has found that there has already been a slowdown in job creation across London. It also claimed that the number of Europeans coming to the capital seeking work has dropped, resulting in lower confidence among businesses.
London has always benefitted from a wide range of workers with differing skillsets from across the world. Brexit could make the pool of talent a lot smaller, leading to greater competition to attract and secure some of the finest workers for many sectors.
Until the outcome of Brexit negotiations and plans for the future are clearly defined, we will not know the true impact it will have on London businesses, but either way they will all experience changes in some way.