Brexit and pandemic: huge impact on British economy

After the definitive exit from the European market last January, together with the inevitable blows of the virus also to the economic life of the United Kingdom, the British financial situation has changed considerably compared to the past.

London’s leadership appears to be threatened by Amsterdam’s supremacy, whose trading center became Europe’s largest one in January, increasing the value of shares traded daily by about four times compared to 2020, overcoming London after decades of monopoly.

It is impossible to deny that Brexit is responsible for this decline, especially for the lack of agreement between the United Kingdom and the European Union, when the exit from the Union took place in January. Since then, it has no longer been possible to buy and sell euro-denominated securities in the UK financial markets, resulting in a huge shift in transactions from one financial market to another.

The total value of the shares traded in Amsterdam in 2020 averaged 2.6 billion euros per day, while now it has reached 9.2 billion. Meanwhile, the same value in London went from € 17.5 billion to € 8.6 billion.

On March 3, the Chancellor of the Exchequer, Rishi Sunak, presented a report on the relaunch of the City with the aim of putting London back into competition with other European stock exchanges, using again the Thatcherian model of the Eighties in simplifying obligations.

But London also has Facebook’s model as a point of reference, for its Dual Class Shares Ownership, with which the founders of the company, with a 14% stake in the capital, can hold 60% of the property through voting rights in the shareholders’ meeting.

Not only Amsterdam is benefiting from the British change of route. The UK has increased imports of fresh produce from Morocco in order to reduce dependence on the European Union. Data from HMRC (HM Revenue and Customs) reveal that imports of Moroccan products increased by 51% in January 2021 compared to last year, rising from 20,236 tons in January 2020 to 30,648 tons in January 2021. Leading the rankings there are courgettes with + 822%, followed by strawberries with + 459%.

The Ministry of Agriculture says Moroccan fruit and vegetable exports amounted to 474,000 tons in January 2021. Shipments to the UK accounted for 6.33% of Morocco’s entire exports in January.

On the other hand, the UK is trying to redeem itself and also to recover through an excellent vaccination campaign that has reached the milestone of 30 million citizens who have received the first dose.

Thanks also to Brexit, Boris Johnson was able to enter into better contracts with pharmaceutical multinationals, obtaining more vaccines than the other European countries.

The British government now plans to launch a recall campaign for at-risk categories in September to protect them from new variants of the coronavirus.

It therefore seems that Brexit has also had positive effects, which in the long term may also have a positive impact on the country’s economy.