Britain is experiencing the best of times and the worst of times. Which way you swing will likely depend on the narrative you believe.
There’s the story from financiers who make bets with other peoples money, but who are threatening to skip town for the continent.
And then there’s the one from UK-bound migrants who are willing to gamble with their lives.
Given the stakes involved, I’d say the latter is probably a better indicator of whether Britain’s economy has mojo.
On the one hand, senior bankers across London, brace themselves for aBrexit-related move to Paris or Frankfurt. They moan that they will have to leave England’s capital after Brexit to keep doing business.
Investors also have shied away from the UK since the June 2016 referendum set Britain’s exit from the European Union into motion. Before that vote, one British pound Sterling would fetch around $1.44 versus $1.28 recently, according to data from Bloomberg. That weakness in the currency reflects the uncertainty around what deal the UK will get with the EU. Investors hate lack of certainty, so they put their money somewhere else until the clouds clear. In other words, investors are sitting on the fence until they know more.
Migrants bet with their lives
On the other hand, migrants continue to flock to Britain, even if that means breaking the law and putting their lives on the line. In late December, Britain’s Home Secretary, the U.K.’s interior minister, Sajid Javid, cut short his vacation to deal with the growing problem of migrants attempting to enter Britain by illegal sea crossings.
Increasing numbers of people have been taking night-time trips across the English Channel in rubber dinghies. This might sound like a breeze to those who don’t know any better, but in reality, it is hazardous, and the migrants risk drowning or freezing to death. While the shortest point between the UK and the continent is a mere 22 miles, the Channel is also the busiest shipping lane anywhere on earth. Traveling at night turns what would typically be a devilishly dangerous trip into one where there is a high risk of death. Indeed saving lives is why Javid is working with the French government to help curb the illegal crossings.
The recent surge in illegal Channel crossings comes as the March 29 deadline for Britain’s exit from the European Union draws close. There are fewer than 90 days to go, as of the date this story was published.
Migrants think that getting to the UK after Brexit will make their life harder than it would be if they can somehow arrive on UK shores before the end of March.
We already know there’s a high chance of migrants losing their lives by attempting to cross the channel from France to the U.K. They also know that truth, and yet they continue paying smugglers to do so.
Any economics observer of European countries might want to ponder that tidbit of information. France is nominally a similar-sized economy to the U.K., with similar per capita GDP, and has just as high human rights protections. Plus, much of France has more favorable weather than Britain.
However, just like migrants want to enter the U.S. from Mexico, so people want to move from France to the U.K. And similar to U.S.-bound migrants, the reason would appear to be the economy. Few people doubt that the U.S. is a far more prosperous country than Mexico.
Britain is also prosperous and offers opportunities that France does not. The jobless rates in France at 9.1% is more than twice the 4.1% rate in the U.K.,according to the Trading Economics website. In other words, for people who want to work, Britain is a better bet than France.
Apparently, the migrants know this too.
Some say that the economy is only part of the equation, with part of the attraction being Britain’s because of its generous welfare benefits and its liberal asylum laws. Maybe so, but apparently, Britain’s economy is dynamic enough to absorb new people and rich enough to be generous. That reflects a centuries-long history of Britain offering safe harbor to people fleeing repressive governments or other calamities.