Brexit aftermath

London's fate as financial centre in doubt

LONDON • Investment manager Luke Hickmore watched the early results of Britain's vote last Thursday night and went to bed.

He did not sleep long.

Mr Hickmore, who helps to oversee US$13.7 billion (S$18.6 billion) for a global investment firm, switched on the TV set at 3.30am London time, and thought: "This doesn't look like it's going to go the way the market priced in."

In the span of a few hours last Friday after Britain voted to leave the European Union, the pound had fallen to its lowest point since 1985. "It feels a bit unreal," he said.

 

Thirty years ago, former prime minister Margaret Thatcher spurred a wave of financial deregulation known as the Big Bang that cemented London's place as a world financial centre to rival New York.

But in the wake of the Brexit vote, there is a double uncertainty hanging over the finance industry that is the city's economic engine.

While there is the usual stress over the market's gyrations, this time, it is coupled with greater unease about what the future will hold for London as a financial capital, amid warnings that tens of thousands of jobs will move to continental Europe.

The financial district stretches from the stately offices of hedge funds in Mayfair to Canary Wharf. But its heart, the City of London or simply "the City", refers to roughly a square mile where you can find the old walls of Londinium, the city built by the Romans.

After the tumult of last Friday, bankers and traders have pondered where the City's jobs might go - Paris or Amsterdam, with Frankfurt looking the most likely. But few seemed excited about the prospect of living there.

Mr John Lowes, 35, who works at a multinational real estate consultancy, said there was a general "feeling of real concern". "Now what happens? We just don't know," he said.

It will take days and months to sift through the ramifications for the markets and the City, as Britain negotiates its post-Brexit relationships and global financial firms mull over their next steps.

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on June 28, 2016, with the headline 'London's fate as financial centre in doubt'. Print Edition | Subscribe