Ever since the UK voted to leave the EU, news outlets reported that thousands of jobs were set to leave the country and transfer to other financial hubs. Some startups packed up and set up shop in Germany, while multination companies said that they would be moving their business abroad. Some analysts warned that Brexit’s immediate effects would bring massive losses to the country’s retail and financial sector.
Despite such warnings, data analysis shows that London will be fine in the long run. Political journal Politico states that the City of London could actually be £43 billion stronger after the UK officially leaves the EU. In addition, contrary to what the mainstream media reports about the potential rise of unemployment, it would seem that 2/3 of London’s financial service companies plan to recruit more employees in the next 12 months.
Based on FXCM’s current economic calendar, the GBP readings don’t seem to be as volatile as last year. This is good news not only for the country’s employment rate but also startups whose products and services are based on the value of the sterling.
There are many factors why London will retain its place as Europe’s financial capital, which is especially good for startups. For one, the country has a sophisticated legal system that protects businesses from fraud and bankruptcy. London is also a world leader in finance, which will mean that companies will want to stay connected to the expertise found in the city.
Entrepreneurs still love London
Entrepreneurs, tech leaders, and startups in the U.S. still consider London as a great place for business because good, transatlantic relationships continue to flourish post-Brexit. A recent survey pointed out that more than 200 companies still felt that London is the top tech hub in Europe, and the best place to start a business across the continent. London is still ahead of its rival cities, which are racing to overtake the city as the startup capital of the UK.
“Our great city has long been at the very forefront of financial services. When you combine that with our new-found technological expertise, it creates an unrivalled opportunity for companies looking to break into the European market,” said London Mayor Sadiq Khan. “Despite the country’s decision to leave the European Union, there is no doubt that London will continue to be the booming and successful city it is today, open to talent and creativity from across the world and a leading destination for American business.”
The funds that go to tech startups in the UK remain solid, and figures show that it has already been able to hit £372 million since the June 23 vote. Investments for London startups, on the other hand, accrued £316 million in the same time frame, which is more than Paris, Amsterdam, and Dublin.
UK-based companies continue to have no problems bringing in business from EU-member states to the country. Here on our blog we discussed how Brexit had little impact on Swedish businesses entering the UK. Also, Britain remains one of Europe’s most attractive markets for foreign investments, and last year was their strongest financial YTD.
There is no doubt that the business sector may face some challenges in the upcoming years. Yet, London will always remain one of the best cities in the world for startups due to the expertise and infrastructure already in place.