On June 23, Britain will vote on whether to leave the European Union.
For those like me, brought up in Britain and now past middle age, it’s an exciting moment. A chance to redo the referendum vote of 1975, when a 67% majority of the country (including me) voted to stay in.
Alas, having lived outside Britain for more than 15 years, I don’t get a vote this time.
So will Britain vote to leave?
At the moment, polling shows that the vote is quite close.
But the most difficult question for the electorate will be what they’re voting for: What would the British economy look like if it left the EU?
London: No Longer Europe’s Financial Hub?
There are clearly some losers from a “Brexit.”
The City of London has built its modern business partly on being the financial center for the EU.
It employs hundreds of thousands of non-British EU nationals and doesn’t actually have much British presence at all in its top management, with most banking behemoths controlled from foreign head offices.
A Brexit means Britain will lose much of its EU financial centerbusiness – EU bureaucracy will see to that.
However, London will probably still remain the top financial center in Europe. The City does too much business with Asia, the Americas, the Middle East, and the world in general, to lose out entirely to Paris or Frankfurt.
Nevertheless, while the City’s modest downsizing wouldn’t be great, it would still have a knock-on effect on the rest of the economy…
Real Estate: London’s Housing Bubble to Burst
Most importantly, the London real estate market bubble would finally pop.
House prices there are around four times higher in real terms than they were 20 years ago, which wasn’t a time of market depression.
Hence, we could expect to see house prices in the city decline by about three quarters, as relatively wealthy Europeans and a mass of “hot money” types move out.
Leave A Comment