London More at Risk from Cliff-Edge Brexit Than Rest of Britain, Report Says

London is at “immediate risk” of a hugely damaging 22 billion British pounds (31.17 billion U.S. dollars) economic hit in the event of a worst-case scenario hard Brexit, a report warned Tuesday.

The British capital is more exposed than the rest of Britain to a chaotic cliff-edge departure from the European Union because of its heavy dependence on the service sector, particularly financial services, and its reliance on skilled workers from the European continent, the report said.

Brexit is arguably one of the most urgent and pressing issues facing London and the British economy.

The report, entitled “Brexit and the Metropolitan Areas,” was commissioned by the London Chamber of Commerce and Industry. It said that the economy of London “is at immediate risk from Brexit if not handled carefully.”

This means a “no-deal” scenario next March would see the capital’s economic growth slump into the slow lane compared with the rest of the island country, said the report from the city forecasters, the Centre for Economics and Business Research (CEBR), one of British leading economics consultancies.

Failure to secure a Brexit deal with the EU could leave more than 2.5 million jobs vulnerable or at risk, a separate report warned earlier this year, adding that sectors such as professional, scientific, administrative and technical services are likely to be the hardest hit in such a scenario.

Brexit could cost London 5.5 percent of growth, equivalent to 22 billion pounds (31.17 billion U.S. dollars) of output, over 15 years, the report said.

The effects would be mitigated by new trade deals and by cutting red tape, according to the report, which also said that these “highly speculative” gains have to be compared with the “relatively certain” losses from lost EU trade and reduced migration.

Whereas London’s growth has easily surpassed that of Britain as a whole for most of the past 30 years, it would lag behind until at least 2024 after Brexit, said the report, which also looked at the impact on Manchester and Bristol.

London Fashion Week, which brings designers and their fashionista followers flocking to the capital, could become one of the most high-profile victims of Brexit, news reports said earlier this year.

Fashion industry bigwigs, politicians and lawyers say Britain’s withdrawal could make must-have fashion styles on London’s catwalks vulnerable to design theft, news reports said.

The British fashion industry’s exports are thought to total 9.1 billion pounds, or 12.9 billion U.S. dollars, a year, and the industry supports around 177,000 jobs.

Concerns centre on complex but vital rules known as “EU unregistered community design rights.” These protections mean designs first presented within the European Union (EU) — currently including Britain — cannot be copied by others in the bloc for three years.

They say the issue needs urgent attention or risks designers deserting London for Paris and Milan — already powerful rivals.

A survey of 500 designers by the British Fashion Council in 2016, before the Brexit referendum, found that 90 percent of the 290 that responded wanted to remain within the EU. Just 4.3 percent wanted to leave.

The British Fashion Council has also raised concerns in a report sent to the Parliamentary Culture Committee.

London was the only region in England that voted to remain in the EU referendum, but the British public as a whole voted to leave, and London has to respect the majority will to leave the regional bloc.

“I am optimistic about London, London’s future and the future of our country,” Mayor of London, Sadiq Khan, once said in response to the outcome of the Brexit vote. “In the long term, our capital will continue to thrive, continue to be open and continue to be a world leader.”

“But at the same time, we should be under no illusion about the scale of the challenges that lie ahead – and the potential consequences of a badly managed Hard Brexit,” he said. “These are risks we simply can’t ignore.”

“London is the economic engine of our country, accounting for a third of national growth,” the mayor said. “When London succeeds, Britain succeeds. But the (British) government’s negotiation position … puts London’s and Britain’s economic prosperity at risk.” (Xinhua)