A regular on television, radio and podcasts, Vicky is Chief Economic Adviser at the Centre for Economics and Business Research (CEBR and Chair of the Economic Advisory Board of the British Chambers of Commerce. She is also a Visiting Professor at King's College London.
She was previously Joint Head of the UK Government Economic Service, Director General for Economics at the Department for Business, Innovation and Skills (BIS) and the Senior Managing Director at FTI Consulting.
She is a former Partner and Chief Economist at the accounting and consulting firm KPMG and has held senior economic positions across the banking and the oil sectors. She is co-founder of GoodCorporation, a company set up to advise on corporate social responsibility. She was the first female Master of the Worshipful Company of Management Consultants. She is also on the steering committee of the Greek-British Symposium and on the Steering Council of komvos-node.org.
Her latest book, Mismanaged Decline,What Politicians won’t tell you about the Economy, jointly written with Prof Andy Ross, was published to coincide with the recent Budget and was the subject of one of Radix’s monthly webinars which can be heard here.
The London economy post-Brexit
This is an abridged and edited version of a chapter on Brexit’s impact on London appearing in the Patrick Diamond and Lizzie Simon edited forthcoming book:’Governing the Capital: The Politics and Policy of London in the 21st Century’, Routledge
It was clear that for London, which accounts for some 20-25% of total UK’s GDP and which voted overwhelmingly to stay in the EU, the referendum result on the 23rd of June 2016 came as a shock. The multicultural capital, one of the most diverse society in the UK, had to cope with a new reality. Sir Sadiq Khan was London’s mayor when the actual Brexit exit at 11pm on 31 December 2020, having followed Boris Johnson who was hugely instrumental in the campaign to leave the EU. At the time he had bemoaned the fact that Johnson ‘used to understand the importance of the EU for London’ (Eardley and McKiernan, 2026: NP). Khan is now, still as London’s mayor, calling for Labour to fight the next election on a pledge to rejoin. The Chancellor Rachel Reeves has strengthened and multiplied her own references to Brexit as contributing to the UK’s ills, seeking, along with PM Sir Keir Starmer, a ‘reset’ of relations with Europe and closer dynamic regulatory realignment in several areas. And the potential Labour contenders for the Premiership, should there be a contest at some stage, all mention either rejoining at some stage or closer attachment as a longer-term goal.
London remains the main artery for the UK economy despite Brexit. London and the South East have long been the only regions in the UK with productivity growth above the UK average and the only ones also providing positively to the Exchequer. Though in a number of the intervening years since Brexit the economy has grown faster than many in the G7, that growth and the underlying productivity across the economy have both by all accounts been lower than would otherwise have been the case if we had stayed in the EU.
In fact, if anything, the initial negative predictions for growth were too timid. The Resolution Foundation in April 2026 suggested that in fact the cost to the economy by the end of 2025 may well have already been double the 4% forecast originally by the Off9ce for Budget Responsibility (OBR) and others (Resolution Foundation, 2026). David Smith in the Times has also reminded us that since 2016 when the Brexit vote took place the UK has seen the slowest growth in GDP per head apart from Germany[i]. And it looks like Britain on its own may have become less resilient to external crises as a result, with London also affected.
It is true than on exit, the UK lost its mutual recognition status for financial sector regulation vis a vis the EU as Britain became ‘a third country’. This was replaced by a series of ‘equivalence’ rules which could be withdrawn by either side at a 30-day notice. Indeed, some activities and a certain amount of investment that would have taken place in London’s finance sector had we remained in the EU have moved elsewhere, into other EU centres or to New York. Businesses and trade organisations in London point to evidence that tourism, universities, the creative sector and retail and hospitality where London has traditionally excelled have all been damaged to some extent from the sudden appearance of non-tariff barriers in EU trade. Exiting the single market and abandoning free movement and the reciprocal acceptance of qualifications are all being blamed. The withdrawal of EU workers who for example pre-Brexit accounted for some 40% of construction workers in London has also accentuated skill shortages in various sectors.
Nevertheless, when all is said and done, London as a mostly service-oriented economy appears to have been less affected by Brexit than originally feared. Despite no actual goods tariffs as part of the Trade and Cooperation Agreement between the UK and the EU, it is manufacturing regions of Britain (excluding Northern Ireland, which has effectively remained in the EU for trade purposes) which have been damaged more by new costly goods trade certification and safety standards bureaucracy. London has had to cope with a multitude of issues, but the City of London, where predictions pre-Brexit suggested a dramatic fall out, has, against expectations, managed to retain its preeminent position as the number 2 world financial centre.
So while goods trade with the EU has suffered, that has not been the case in services.
Just under half of UK exports have traditionally been in services, which is twice that of the OECD average. Much of that is generated in London and the City. In the event, UK service exports have continued to rise to the EU and the rest of the world since Brexit and London has increasingly developed into a tech and digital hub with a vibrant and growing fin tech and venture capital sector, increased activities of private equity firms and growth in non-bank financial intermediaries. The financial sector therefore remains for the moment a crucial part of an admittedly more slowly growing economy, accounting for some 20 per cent of total service exports and some 50 per cent of the UK’s services trade surplus with the rest of the world.
On the face of it, therefore, while exit from the EU has undoubtedly impacted London’s image as a financial gateway to Europe, the City has seen continued growth. The City remains keen to retain its comparative advantage in this area , though the same time worried about the availability of skills and lack of freedom of movement that may constrain its expansion and is therefore stressing the importance of working more closely with Europe . But in truth, there are few other places, except perhaps New York, which can boast an equivalent ecosystem of full financial sector capabilities, professional and business services, including legal and accounting and a series of support services in its periphery, reflecting very much what economies refer to as the positive ‘agglomeration effect’, with ancillary and back-office services spread across the country.
However, things are not that simple: Federal Trust analysis by John Springford (2025) showed that the growth in services activity post Brexit has not been confined to the UK. Other advanced economies also saw service trade expansion in recent years as demand for services including in the digital area, tech and professional services as well as in finance and transport have been increasing worldwide. Yes, the UK benefited, and London in particular, given its relative strength. But in finance and transport services, both vital sectors for the UK and London, ‘exports grew much more slowly than the average of other advanced economies’ (Springford, 2025: 5). This suggests need for vigilance ahead:
