We have made history by becoming the first member state to give notice on our membership of the EU.
But given that I will be explaining why I see the UK economy blossoming post-Brexit, it’s worth starting with a bit of my own history. I began student life in 1984 as an undergraduate at the LSE. Despite being three Piccadilly Line stops from Caledonian Road, where I had grown up, it was a world away from Holloway Comprehensive School where I had been a pupil. I thoroughly enjoyed my years at the LSE, and am thankful for the economics it taught me and the subsequent opportunities it afforded me, such as to research and teach at Oxford while writing my PhD.
While these experiences gave me some preparation for entering capital markets in 1991, however, it was on a series of dealing floors over 25 years that I have learnt my trade as an economist. So it is as a veteran economist – not as a youthful and inexperienced commentator – that I am confident stating that, in the aftermath of the historic referendum vote, our economy will strengthen rather than struggle.
The economy will strengthen because the pound’s decline has delivered a raft of positive boosts. It has made the UK more competitive for tourists and more affordable to buy goods and services from. It has cheapened our private medical clinics and our universities, which have become industrial in scale, generating considerable and very tangible invisible “export” earnings.
Although London boasts a host of higher education institutions, it does not have exclusivity. Rather they are spread across practically the whole country, and they have just become markedly more affordable for the growing middle classes across the emerging world to send their young adults to, and we will earn generously from them in turn.
Inside the EU, we have been telling affluent Indians we do not want to educate their young adults and have refused the lucrative fees and living expenses which accepting them would bring. We are telling Australians, New Zealanders, and Canadians that, despite our deep-rooted historic Commonwealth, they do not have the same privileges to enter the UK for work as EU nationals. This is not to say that Bulgaria or Latvia, Estonia or Slovakia or any of the other EU nations have comparatively inferior populations. Rather, that there is nothing particularly superior about them.
In leaving the EU, we can now correct this prejudice for the UK’s economic good. The benefits of a more competitive pound will improve the fortunes of our manufacturing base too, helping to lift growth where it is centred for the most part well beyond London.
Finally, there have been concerns that the vote to leave exposes the City of London to the risk of business being wrenched from it. Although I have no doubt efforts will be made to this effect, I am sanguine all the same. In markets such as insurance underwriting, London’s excellence is peerless across Europe, with the demand to participate in that market growing strongly beyond Europe from emerging nations whose insurance markets are, in effect, in their infancy.
Moreover, our not being in the EU is no reason for China and many others not to be in London, since Beijing and other business centres across the emerging world and beyond – and I include Sydney and Singapore in this list, as well as Kuala Lumpur, Jakarta, Toronto and Wellington – have no interest in London for its “passporting” rights, but because of its time zone, language, labour force and regulatory regime.
In short, Brexit will not stop the UK as it heads towards becoming the largest nation by population and the biggest economy in Europe within most of our lifetimes.