During an interview with London’s Evening Standard earlier this year, the notorious former stockbroker and real-life ‘Wolf of Wall Street’, Jordan Belfort, told the paper that we shouldn’t be worrying about London bankers moving in their droves to Europe’s financial centres post-Brexit.

Jordan Belfort says Brexit Britain will be ok

His reasons for his optimism included the fact that the City is a centuries-old banking stalwart, with its legacy making it a trusted centre for investment. Furthermore, it’s a financial legend that carries the university of the English language, before adding with some relish that no banker “wants to go to Frankfurt,” anyway.

Does he have a point?

Call his comments nothing more than mere arrogance of Churchillian proportions, but Belfort isn’t even British, he has no agenda.

He’s electively wading into the debate based upon his industry experience. So do his comments carry any credence? Moreover, are we, with all our collective scaremongering about Brexit, underestimating the City’s capability for resilience?

A new report spells out falling optimism

A new study assessing confidence levels in the UK banking community would fundamentally disagree with him.

The report, fresh off the shelves from PwC and CBI, (the Confederation of British Industry), suggest that confidence in Britain’s financial services, (that makes up 7% of the country’s GDP), is at its lowest rate for a decade.

Does wavering optimism = disaster?

What’s more, they say that banks are bearing the brunt of this loss of market optimism. – So should London’s financial elite start packing their bags and booking that Frankfurt bound flight, despite what Belfort says?

Any forces that cause stalling or stagnation or indecision in an economy are never great. But this proverbial ‘waiting game’ over Brexit hasn’t led to a recession since the outcome of the vote in 2016. So why would it now?

There’s little doubt that Brexit related delays have created a cloud of indecision that’s been hanging over the  UK economy and causing declines in output, and yes, says the CBI, Brexit may have contributed to an economic slowdown, but does that necessarily mean the UK will enter next recession as a result?

‘Crying wolf’ over a recession

There have been commentators who’ve predicted Brexit-related recessions before. Most notably around the time of the Brexit vote in 2016, when Bank of England Governor, Mark Carney, warned that a ‘leave’ vote would trigger a “technical recession,” but as we know, that didn’t happen.

Neither did the 500,000 to 800,000 job losses the treasury predicted would happen as a direct result of the vote manifest either.

But then, is on-going indecision about the carrying out the people’s vote more serious in terms of its capacity to trigger a real recession than a mere vote on the matter?

More Brexit related ‘hot air’?

It’s the lack of transparency, clarity and decision making on the Brexit issue that’s making financial firms stall, and for the economy to slow, not Brexit in and of itself.

Then there’s the stalling car economy. While Brexit could cause it some operational damage, (cue* port delays and high trade tariffs on trade in the EU), there are other factors that are causing the sector to suffer.

This is compounded by the carefully chosen words of the CBI’s chief economist, who said the results of their survey showed that a possible no-deal outcome “is hitting confidence.” – Not necessarily leading to a definite recession then?

Where is the banker exodus?

General ‘confidence’ in the sector may have been affected since the UK electorate made the decision, (albeit narrowly), to leave the EU, but ‘confidence’ is still rooted in human sentiment – and not facts.

For example, Sky News has recently reported that predicted Brexit-related disasters such as a ‘banker exodus’ from London to European hotspots has “failed to materialise.”

Other factors

Could there also be other, (non-Brexit) factors that are affecting the health of the UK’s financial services sector?

Well, yes. And the escalating US-China trade war is one of them. Moreover, if this unresolved geopolitical issue between two of the world’s superpowers isn’t hurting City finances  – then I’ll eat my hat.

Industries are undergoing change

Then there’s the stalling car economy. While Brexit could cause it some operational damage, (cue* port delays and high trade tariffs on trade in the EU), there are other factors that are causing the sector to suffer.

The car industry is at an economic and innovation cross-roads across Europe with emission scandals, the advent of electric cars, and consumer shifts towards shared mobility services.

Lack of optimism or stagnation does not mean a recession – yet

What can come out of all this ‘back and forth’ debate about Brexit? – That any forces causing stalling stagnation or indecision aren’t great for an economy, granted.

But this proverbial ‘waiting game’ hasn’t led to a recession since the outcome of the Brexit vote in 2016. So why would it happen now?

And while there are factors other than Brexit that are affecting the health of the financial services sector and the UK economy at large, there’s still scope for a fundamental lack of leadership at the highest levels, (namely PM, Boris Johnson), who could spin the nation into a recession if the Brexit button is never pushed.

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