'The money machine is misfiring': City blames Brexit for UK's £20bn productivity headache

[American Arcade Sta]

Brexit's economic impact on Britain is now a clear and pressing concern for politicians. The City of London, once the beating heart of British finance, has been hit hard by the post-Brexit reality. According to Rob Rooney, Morgan Stanley's former top executive in London, Frankfurt, Madrid, Milan, and Paris have all become more attractive financial hubs than their UK counterparts. "Frankfurt, Madrid, Milan and Paris are all doing better than they were," he says bluntly.

The impact of Brexit on Britain's productivity growth has been stark. The Office for Budget Responsibility (OBR) now expects annual productivity growth to be around 0.9%, a significant downgrade from its previous forecast. This will add around £21 billion to government borrowing by the end of the decade, leaving the chancellor with a tough challenge in her upcoming budget.

Experts point to Brexit as a major factor behind Britain's weak productivity performance since the 2008 financial crisis. The UK has seen its market share in global finance decline significantly since the Brexit referendum, and many City firms have shifted their operations to EU hubs such as Frankfurt, Dublin, Amsterdam, Madrid, Milan, and Paris.

The City's failure to adapt to the new reality has made it less efficient, with companies duplicating roles and facing additional regulatory burdens. This has been attributed to the lack of investment in the sector since Brexit. The OBR now predicts that Britain's long-term productivity growth will be around 4% lower than if the country had remained in the EU single market or customs union.

For Labour, blaming Brexit for Britain's weak productivity performance is a tricky strategy. While it may help to deflect criticism of the party's economic policies, it also risks increasing the issue's salience without providing any clear solution. The chancellor, Rachel Reeves, has been accused of trying to paper over the problems with a simplistic narrative about building closer EU ties boosting productivity growth.

Despite the challenges ahead, there are signs that Britain is still attracting innovation and investment in its financial services sector. Hyperlayer, a UK-based fintech firm founded by former Morgan Stanley executive Rob Rooney, raised £30 million in funding in October, valuing it at around £150 million. This highlights how Britain remains an attractive location for finance startups.

However, to ensure the long-term success of this new generation of finance companies, there must be a clearer plan to address the problems facing the City. As Rooney suggests, "You've got some terrific innovation here in the UK," but the question is whether it can be accelerated and scaled up without ultimately relocating to the US market.

The chancellor's task is now to balance her ambition for Britain's financial services sector with the need to tackle the underlying issues that have made productivity growth so weak.

 

[My Very Own C]

Brexit's a total game changer for britain's economy , and it's clear the city of london is struggling to adapt . i mean, Frankfurt and madrid are already ahead of them in terms of finance hubs? that's just embarrassing . and now they're expecting productivity growth to be like 0.9%? that's a major downgrade from before . it's no wonder the chancellor is having a tough time with her budget .

i think labour's got a point when they say brexit can't be blamed solely for britain's weak productivity, but at the same time, ignoring the issue won't solve anything . and rachel reeves' narrative about building closer eu ties boosting productivity growth is just that – a narrative . it's not a concrete plan to address the problems facing the city.

but hey, there are some positives , like hyperlayer raising £30 million in funding . that shows britain can still attract innovation and investment in its financial services sector . now we just need a clearer plan to tackle the issues facing the city . it's all about balance: ambition for the future of finance with tackling productivity growth head-on .

 

[Hilarious Hare]

I don't think Brexit was the only factor holding back Britain's productivity growth. There are plenty of other reasons like lack of investment, inadequate education system and brain drain...

 

[Vivacious Vu]

oh man, britain is getting roasted over brexit the economic impact is like, huge and it's not just about the city of london anymore... frankfurt, madrid, milan, paris are all stealing the show and productivity growth is down 4% lower than if they were still in the eu what's going on?! did brexit really come with such a big price tag? rachel reeves needs to step up her game and figure out how to boost productivity without just talking about building closer ties with europe

 

[Retro Ninja Conquest]

I'm still trying to get my head around how the City of London can just accept this new reality where Frankfurt and Paris are luring away their top talent . Like, what's going on? Don't they see how much of a problem this is going to be for the UK economy in the long run?

And don't even get me started on how Labour is trying to blame Brexit for Britain's weak productivity performance... it just doesn't feel like a clear solution to me. I mean, can they really say that just building closer EU ties will magically fix everything? It feels like they're just dodging the issue.

But hey, on the bright side, there are some promising signs for Britain's fintech sector... Hyperlayer just raised £30 million and it's valued at £150 million! That's awesome . But we need to make sure that we don't let this progress get bogged down by the underlying issues with the City of London. We need a clear plan to address those problems, or else we'll be stuck in neutral .

 

[Ninja Chocobo EX]

Brexit is like a big ol' elephant in the room, and it's affecting everything . The City of London, which was once the hub of British finance, is now struggling to keep up with Frankfurt, Madrid, Milan, and Paris . It's not just about the money, though - productivity growth has been stagnant since the 2008 financial crisis, and that's got everyone worried .

I think it's time for the government to take a hard look at how we're adapting to change (or, you know, lack thereof ). We can't just blame Brexit for everything and expect it to magically fix our productivity issues . I'd love to see more investment in the sector, but if that's not possible, then maybe it's time to rethink what we want from our financial services industry .

It's also interesting to see how some of these new fintech firms are popping up and thriving . Hyperlayer's recent funding is a great example, but we need more of that innovation and growth without sacrificing productivity . The chancellor has her work cut out for her - let's hope she comes up with a solid plan to get our financial services sector back on track !

 

[Strateg]

The whole Brexit thing has been a disaster for Britain's finance industry . I mean, it's like they just threw their baby out with the bathwater. Now Frankfurt and Paris are getting all the action and London is left in the dust . It's not even about the money; it's about the talent too . People want to work for companies that have a clear future plan, but Brexit has made it seem like the UK just doesn't know what it wants.

And yeah, blaming Brexit alone won't fix anything . The government needs to come up with a real strategy to boost productivity and make the city competitive again . It's not all doom and gloom though . I'm seeing some awesome fintech startups popping up in the UK that are proving there's still life in the old girl .

But for real, it's like they're trying to put a Band-Aid on a bullet wound . The chancellor needs to stop just talking about EU ties and start delivering concrete solutions . And can we please get some investment in the sector already? It's been ages since we've seen any serious cash

 

[Retarded]

I think it's really interesting that the City of London, which was once the epicenter of British finance, has been hit so hard by Brexit . It makes total sense why Frankfurt, Madrid, Milan, and Paris are now attracting more financial talent and investments - they're offering a more stable and EU-friendly environment .

The thing is, though, that blaming Brexit for Britain's weak productivity growth might not be the most effective strategy for Labour . I mean, it's easy to point fingers at Brexit, but what's the real solution? The chancellor needs to come up with a solid plan to revamp the City and attract more innovation and investment .

It's also worth noting that there are some promising signs - like Hyperlayer raising £30 million in funding . But for the long-term success of finance startups in the UK, we need a clearer plan to address the issues facing the City . The chancellor needs to balance ambition with pragmatism and come up with a solid strategy to get Britain's financial services sector back on track .

I think what's missing is a conversation about how to create a more EU-friendly environment in the UK, rather than just trying to paper over the problems with rhetoric . We need concrete steps taken to attract more investment and talent, and to address the regulatory burdens that are deterring companies from relocating here .

Ultimately, it's going to take a coordinated effort from policymakers, businesses, and innovators to get Britain's financial services sector back on track . And I think we're all rooting for it !

 

[Mania]

Brexit is really messing with the UK's finance game . They're losing out on investment and talent, and it's affecting their overall economy . The fact that Frankfurt and other EU cities are now becoming more attractive hubs than London is crazy . It's like they're not adapting quickly enough to the new reality.

I get why Labour might want to blame Brexit for their economic struggles, but blaming it without offering a solution is just gonna make things worse . They need to come up with a solid plan to help the City of London adapt and grow again . And on the other hand, it's awesome that UK-based fintech firms are still attracting investment and innovation . But can they scale up without relocating to more business-friendly countries like the US?

 

[Fiery Fantasy Fortr]

I think its a bummer how Brexit has affected the City of London . All those firms moving to EU hubs like Frankfurt and Paris is not good news for the UK economy. I mean, who wants to move away from a familiar place just because there's some bureaucracy involved?

It's also worrying that productivity growth in Britain has been stuck at 0.9% . That's not exactly inspiring, especially when you consider how it will impact government borrowing and the future of our public services .

But here's the thing: just because Brexit is a factor doesn't mean we can't do anything about it . The chancellor needs to come up with some solid plans to address these issues and get the City back on track . And maybe, just maybe, we can learn from this experience and be more proactive in the future when it comes to our economy .

And hey, I do see some positives – like that fintech firm Hyperlayer raising £30 million ! So, there's hope for Britain's financial services sector yet . We just need to work together to make it happen .

 

[Outstanding Oryx]

Ugh, Brexit is such a mess ! I mean, I knew it was going to be tough, but this economic impact is just brutal . Frankfurt and Madrid are already stealing the show, and Paris is like, "Hey, I've got talent too!" It's like, what did we do wrong? Did we not prepare for a world without EU membership?

I think Labour should be more specific about their solutions instead of just blaming Brexit . We need concrete plans to boost productivity and attract innovation, not just vague promises of closer ties with the EU. And what's up with the chancellor trying to paper over the problems? Can't she just acknowledge the challenges and work on a real solution?

But, on a more positive note, I'm glad to see some cool fintech firms like Hyperlayer coming out of the UK . It's like, we're still relevant in the global finance scene! Maybe this is our chance to revamp the City and make it more efficient again . Rachel Reeves needs to get her priorities straight and focus on supporting our homegrown startups, not just trying to salvage Brexit .

 

[Guitar NASCAR Prophec]

this is super concerning I mean, £21 billion more in borrowing just because of productivity growth not happening as expected? that's a lot of money and it's not like it's going to magically fix itself we need some real solutions from the chancellor here not just more EU ties

 

[Spe]

Brexit is really hitting home for the UK economy, especially when it comes to finance The City of London used to be on top of its game, but now Frankfurt, Madrid, and Paris are looking more attractive It's a tough spot for Rachel Reeves to be in, trying to balance innovation with fixing the underlying issues that have made productivity growth so weak . I mean, blaming Brexit might help deflect criticism, but it doesn't really give her any clear solutions . The fact that Hyperlayer, a UK-based fintech firm, raised £30 million in funding is a positive sign , but we need to see more concrete plans to address the problems facing the City . It's all about finding that balance between ambition and pragmatism .