It’s now the morning after the week before and while winds of change are indisputably blowing, people and businesses are starting to accept the reality of the situation and settle down. Since TPP customers are as likely as anyone else to be wondering what effect this is going to have on their business, we thought this would be a good time to give our take on the matter.
London is a city of about 8.5 million people
While London is a city built on immigration and international commerce, only a relatively small percentage of the population would be legally classed as immigrants of any sort, let alone EU immigrants. Therefore even in the scenario where all EU immigrants were forced to (or chose to) leave the UK, there would still be a significant population left.
London is one of the world’s most affluent cities
Although it’s true that some members of London’s affluent population will be EU migrants and, in theory, all of these people could return to their country of origin, notwithstanding this, however, there is still a significant population of affluent London residents, who are perfectly happy living here.
Some jobs may relocate overseas
That’s true, but companies come and go in London all the time. Fleet Street used to be home to the UK’s major newspapers, but they have all moved elsewhere (mostly to Wapping). The buildings, however, are far from empty. They have been taken over by the AA and many businesses from the worlds of law and finance. This is basically the history of London in microcosm, companies come and go as their needs and wants change. Many companies choose to retain some presence in London, to take advantage of all the benefits the city has to offer, while moving part of their operations elsewhere, often where there is more space available after they have literally outgrown their London premises.
The pound and the stock-markets will suffer and business will be hurt
Let’s look at these one at a time. A weak pound is bad news for those needing to import, but it’s great news for exporters and those seeking to encourage inbound tourism. The stock market is influenced by a variety of factors, one of which is investor confidence. The reality, however, is that companies with solid fundamentals will probably return to normality fairly quickly, if only because they will be snapped up by bargain-hungry investors. Companies which are trading at higher prices than their earnings figures alone would suggest will probably return to normal quickly if these high prices are justified, for example by the quality of the management, the products or services or reasonable expectations of positive future performance. It is companies which were trading at unrealistic multiples, which will suffer and, generally-speaking, these companies were probably due for a fall anyway. Their place will be taken by companies which operate on a healthier basis.