While the world was transfixed on the mayhem on Wall Street, there was a landmark moment in the City of London.
The Square Mile surpassed £100billion of economic output for the first time, according to the Office for National Statistics. The number, the latest available, is for 2023 so does not take account of the latest Trump-induced shocks. But coming after the trauma of Covid and the upheaval of Brexit, it is still a testament to the City’s resilience.
Brexit and the Liz Truss bond debacle were seized upon by international rivals to brand the UK stupid and retrograde and to try to lure business from the City.
The mood in the Square Mile has been dour of late, with the US seen as a land of milk, honey and high valuations and London being painted as a hidebound market in an over-regulated and retrograde country. Those views are, thanks to Trump, being reassessed.
There are opportunities for the UK to take advantage of the fear and chaos of Trump’s America. The question is whether this Labour government has the wit to grasp them.
Global investors, including British defined contribution pension funds, have poured money into the US market with abandon in recent years, dwarfing the sums invested in UK shares.
Man with a plan: There are opportunities for the UK to take advantage of the fear and chaos of Donald Trump’s America
In Trump’s first 100 days, however, the US markets have looked less like the engine room of growth for global investors and more like a screeching emergency brake on an intemperate president, who bulldozes over legalities, defies convention and lacks civility. The City seems almost an oasis in comparison, offering investors respect for the rule of law, a commitment to free markets, an independent central bank and indeed basic sanity.
Senior figures in the Square Mile see chances to steal a march. They spy the potential for London to lead in green finance, given that Trump has been so disparaging of environmental concerns.
They also see a chance to do more business with developing nations in Asia and Africa, which do not wish to be hostages either to Trump or to China.
And the UK and Europe need to bankroll a much stronger independent defence capability, now that Trump has made clear the US cannot be relied upon.
The natural home for a ‘Bomb Bank’ to finance rearmament would be the City of London.
The UK should also be a natural home for financiers who are not at home in Trump’s America. But Labour’s spiteful non-dom rules, in particular the dragging of non-UK assets into the inheritance tax net, are driving people away, including Richard Gnodde, the hugely respected Goldman Sachs boss, who is moving to Milan.
Sir John Kingman, the chairman of Legal & General, has written recently of a ‘tragic crisis’ in US science, caused by Trump’s assault on universities and his tariff threats to pharma companies.
This, Kingman believes, will ‘imminently’ provoke ‘the greatest migration in scientific talent the world has ever seen, probably larger than that from 1930s Germany’. The Aussies and the French have been quick to try to lure these big brains – the Government should not allow the UK to miss out.
Even if ministers have the sense to make the best of the situation, the silver linings may not be enough to compensate for the needless harm the US President is inflicting on the world and its wallets. But defeatism helps no one: some of the greatest achievements are created out of crises, by the clever and the resourceful.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .