People & Money

As London faces off threats to its global status, Dubai is waiting in the wings

Since the result of the 2016 Brexit referendum on our future in the world and beyond the single market, one of the issues which has caused most angst and speculation has been the status of London as one of the world’s greatest financial centres. With the end of free movement of goods, services and people, many Remainers pointed spectral fingers at rivals like Paris, Amsterdam, Dublin and Frankfurt, cities which, still inside the EU, would sap the City of London’s strength and usurp her pre-eminent position.

The most apocalyptic fears have not been realised. Some had talked of hundreds of thousands of jobs in financial services and connected industries being lost: in fact most estimates currently hover around 7,000 to 8,000. It is true that nearly 500 institutions have set up new hubs within the EU, but this has not equated to a flight from London.

Although we are by no means in an end-state of post-Brexit financial regulation, the conditions in the City have not (yet) been rendered so uncompetitive as to draw business away to the continent. Indeed, some EU businesses have established offices in London in order to cater for the substantial and highly developed UK market.

Many reasons for this relative calm can be adduced. London has, of course, a critical mass all of its own as a financial centre, only rivalled on the global stage by New York, with a sophisticated ecosystem of bankers, lawyers and investment managers drinking from a deep well of liquidity. That extends into a great deal of “soft power” attractions: education, culture, retail and hospitality. To be blunt, the ‘masters of the universe’ would rather live in London, a world city, than fractious Paris, sleepy Dublin or staid Frankfurt.

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