Britain’s vote to leave the European Union has already come at a cost regardless of where Brexit goes from here. Some of the damage is tangible, such as jobs, investment and capital; some of it less so, like international clout and talent.
Prime Minister Theresa May’s defeat again in Parliament on Tuesday evening leaves Britain likely to seek a delay to Brexit. The EU needs to agree to it and officials in Brussels have warned there’ll be no further renegotiation.
Meanwhile, the threat of economic pain still looms over the country. The political impasse remains as entrenched as ever, even if, as expected, Parliament votes to avoid leaving the EU without a deal.
Here’s a look at where there’s been the biggest impact so far.
The Economy
The vote to leave the EU in June 2016 has cost the U.K. about 800 million pounds ($1 billion) per week, or about 2 percent of total economic output, Bank of England policy maker Gertjan Vlieghe said last month.
Optimism among firms is at its lowest in seven years, according to Lloyds Banking Group, and businesses have recorded the longest continuous decline in investment since the financial crisis a decade ago. Not all of this investment will be recovered even if there’s a smooth exit process, the central bank warns.
The pound is down more than 10 percent against the euro since Britain voted to leave the EU. That’s increased the cost of imported goods and services, boosting inflation and eroding purchasing power for consumers. British exporters, meanwhile, have failed to take advantage of the weaker pound to grow their market share.
Finance
Money and jobs are leaving the City of London as the world’s biggest financial companies rearrange their European operations to protect business.
Five of the largest banks looking to serve the EU are transferring 750 billion euros ($857 billion) of balance-sheet assets to Frankfurt, according to people familiar with the matter. They’ve had to move capital to get continental approval to continue providing services across the bloc.
While fewer bankers have left London than first estimated, moves are being made. The world’s biggest banks have outlined plans to transfer several thousand staff to cities such as Paris, Dublin and Madrid. Those personnel shifts are likely to be irreversible, according to TheCityUK, a lobby group.