LONDON - In the political realm, no one knows how Brexit's long-running theatre of the absurd will end. But for much of the business world, Britain's departure from the European Union has effectively happened.
Japanese carmakers have scrapped plans to expand in Britain, in part because Brexit undermines the country's virtues as a hub for European trade. "The Brits have reneged on that contract. It's destroyed, if you like, the sense that Britain is such a great place to do business. It's a credibility hit. It's a deep wound."
At about the same time, Honda said it was closing a factory in southwest England, in the town of Swindon, eliminating 3,500 jobs. Honda's decision was motivated partly by a trade agreement that Japan struck last year with the European Union. The deal eliminates the need for a factory in Britain, because Honda can now ship cars made in Japan directly into Europe without incurring duties.
The fall in the pound amounts to the market's expression that trade has been obstructed. Britain sells nearly half its exports within the European Union. For more than three decades, London has attracted global banks, trading operations, hedge funds, asset managers and sovereign wealth funds from the Middle East and Asia. The city grew into a global centre of finance second to none, while the industry has employed more than one million people in Britain.
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Source: BusinessTimes - 🏆 15. / 51 Read more »