News / Economy

Think tank reports on how Brexit bleeds Britain

Monday, 11 March 2019 7:21 AM [ Last Update: Monday, 11 March 2019 8:17 AM ]

A van with a billboard entitled “Breaking Point” and aimed at holding the “Brexit Elite” to account, is pictured outside the Houses of Parliament in central London on March 7, 2019. (Photo by AFP)

An independent think tank produces the yet-most intricate report on the proportions of the losses, which the British economy is suffering as a result of Brexit.

New Financial issued the report on Monday, showing how heavyweight international institutions were enacting an exodus from the country as it is about to leave the European Union. Britain would set out on the departure -- decided on during a June 2016 referendum -- on March 29, unless the divorce is delayed amid bickering between Number 10 and the Parliament over a deal on future relations with the 28-nation bloc.

The think tank said gearing up for the departure, more than 275 financial firms were moving a combined £924 billion ($1.2 trillion) in assets and funds and thousands of staff from Britain to the EU.

Those, it added, were mostly choosing Dublin, Luxembourg, Paris, Frankfurt, and Amsterdam as their next hubs.

“Business will continue to leak from London to the EU, with more activity being booked through local subsidiaries,” said William Wright, founder and managing director of New Financial. “This will reduce the UK’s influence in European banking and finance, reduce tax receipts from the industry, and reduce financial services exports to the EU,” he added.

Toll on tax revenue

Ten large banks and investment banks are together moving £800 billion ($1 trillion) of assets from Britain, the report noted.

That equals a 10-percent shift in banking and finance activity, which, in turn, cuts UK tax receipts by about one percent, it added.

London takes the brunt of the departures, although it would retain its might as a financial epicenter, said the company.

Last month, a senior economist at the Bank of England (BoE) said Britain had lost £40 billion ($51 billion) a year since Britons voted to leave the European Union.