Britain’s exit from the EU has created a “headwind” for business, but the effects should prove “digestible”, a leading investment banker told the UK’s Guild of Travel Management Companies (GTMC) conference in Ireland.
Will Hobbs, Barclays head of investment strategy, said: “The UK is a relatively open economy. Brexit should result in a lower-trend growth rate, but the UK has a number of advantages that are hard to erode – well-respected national institutions, a robust democracy, a well-respected rule of law and a flexible and competitive corporate sector.”
Hobbs insisted: “We don’t think it is a disaster. We thought Brexit would pose a headwind, but a digestible one.”
He also suggested London would not lose its primacy as a financial centre. Hobbs told the GTMC: “Frankfurt and Dublin face constraints. France is bidding [to replace London], but you can’t fire people in France and in banking you need to be able to fire people. New York may benefit, but London will retain its importance.”
Hobbs said: “I’ve no doubt Brexit will make the UK a little less comfortable for investors. But we don’t think it game changing. One of the attractions of the UK for investors is the stability of the civil service.
“Businesses may delay spending decisions, but you’re still dealing with an attractive economy in the long term. Brexit has not had the impact many predicted.”
However, Hobbs suggested US President Trump’s imposition of trade tariffs on China and Europe could pose a problem. He said: “A trade war threatens a recession in the next two years. It is likely Trump will extract minor concessions or will back down, but it is a danger.”
PwC partner David Trunkfield, head of the travel and leisure practice at the business services giant, told the conference: “Businesses can’t wait around waiting to see what happens [with Brexit] They need to get on with it and not be paralysed by what is happening in Westminster.”