When the country of UK decided to become independent from the European Union, there was a lot of hue and cry around this decision. The main issue that came up during this decision was about the change in trade policies of the country. After becoming an independent country, it would need to undergo a number of changes, especially in its foreign and trade policies. This not only worried the people residing in the UK but also foreign investors. Before Brexit took place, analysts assumed that this change will adversely affect the market of the country. Recent reports suggest that this assumption is coming true. Effects of the Brexit are visible in the London Economy as foreign investors are gradually losing interest in the same.
According to the latest report by the Centre for London, the market of the city of London especially has started feeling the adverse effects post Brexit. Along with this, foreign investors from a number of Asian countries are reducing the capital they invest in the British market. The report further elaborates upon the decline in the market value of London in particular on an international level. Apart from this, the city is also facing difficulties in the employment sector. Even though the employment rate in London is a low 5.5 percent, the job creation rate has drastically slowed down. This clearly signifies that the city is lacking new projects.
London has lost its appeal
The report also stresses upon the decline in the value of London’s housing market. Experts who contributed to this report have stated that for the London Economy to retain its progress, it needs to be open to international talent. However competitive a country might be, acceptance for international deals is crucial for its growth. Especially in the case of London, it is important to promote the global city concept. This is to make sure that the growth of this city doesn’t remain stagnant.
A major factor which can impose a threat to the growth of the London Economy is the restriction on freedom of movement due to Brexit. Not only this, but the inequality levels are at an all-time high which can be alarming. Congestion and pollution have also increased which was followed by an even worst housing shortage. This report is a reminder for the country to tackle its critical business conditions before it goes out of hand. This is the time the country must be well-prepared to deal with the effects on the market post Brexit.
Importance of international talent
An extensive research about the demography of the working class in London shows that this city is extremely dependent on the EU when it comes to recruitment. In this case, it might get a little difficult for this city if it doesn’t loosen its restrictions on employing people from outside the UK. The loss of workforce the financial capital may encounter can result in a crisis in the financial and business services of the country as a whole. Even creative industries import employees hence post Brexit might hinder their growth as well. Labor-based industries such as hospitality and construction also rely on the EU workers. Let’s have a look at the numbers for an accurate idea of the need for freedom of movement. London houses 13 percent of the UK’s population but one-third of EU's population. This shows the reliance of workers across EU on London for their professional needs.
If this is the scenario, lack of job creation in London may come across as a problem for citizens across EU. This problem hadn’t aroused earlier as EU nationals could freely move about in accordance with their job preferences. But Brexit put a stop to this free movement. If the job creation rate doesn’t come up, then the situation will be close to the 2008 financial crisis. The economy of UK has phased out to be better than expected post Brexit. But the lack of consumer and investor confidence has wobbled the London Economy. A slight change in the trade and employee policies is necessary to make sure that Brexit doesn’t prove to be a bad decision for the country.