The hysteria over the size of our respective stock markets ignores the real threat to the City’s power
The French have much to laugh about at the moment. Their football team will probably cruise past England with ease at the World Cup in the coming weeks. Their economy is growing faster than ours, with lower inflation. And if the Brexit-hating commentariat is to be believed, Paris is now a bigger financial centre than London. Or is it?
It is true that the Paris stock market has just overtaken London’s as Europe’s largest, at least by total value. But this measure is mostly nonsense, since the extra value largely comes down to the success of one exceptional company – Bernard Arnault’s luxury goods empire, LVMH – which has benefited in the short term from an absurdly strong dollar. Its singular performance does not speak for the rounded status of Paris as a financial centre. Indeed, on virtually every metric that matters, London is still well ahead of any European city.
Nevertheless, the Parisian smokescreen was enough to unite every hardcore Remoaner on social media in a moment of pure bliss. “The Luftwaffe set fire to the London Stock Exchange in 1940 and then blasted it with the shockwave of a supersonic missile in 1945 and still did less damage to it than we did,” tweeted the respected historian Dan Snow, who would probably benefit from some business lessons.
This was surely the moment the anti-Brexit crowd had been waiting for years to arrive. They had been disappointed that, after all the Project Fear warnings of 2016-19, the City hadn’t in fact been devastated by our departure from the European Union, and we didn’t see the bankers, hedge fund managers and insurance brokers decamping for Paris, Frankfurt and Amsterdam.