The British pound has crashed some 25% since the Brexit referendum in 2016, meeting resistance not far off from euro parity.
A weakness that illustrates the economic cost of leaving the world’s biggest single market, with further weakness potentially on the way when markets open as chances of a no deal exit now stand at no more than 50%.
The British Prime Minister and the President of the European Commission are now to talk over the hardest of Brexit or a no deal brexit at all.
Long gone are the talks of potentially staying in the single market, of having a Norway style deal or a Swiss style deal. The very close referendum results will instead give 52% everything that they wanted and nothing at all to the 48%.
There will be no passporting for financial services. So British, American and other global companies based in London that want to serve the single market need to move to Europe.
Frankfurt, Paris and Amsterdam have been the biggest winners so far, with billions moving there from the British capital.
On goods, it is probable a deal will be struck with both sides hailing it as a big win, but Britain will be very much an outsider, too far from America to really compete with New York, and now not part of Europe to really compete with Germany.
That risks the island becoming a new Japan, advanced but stagnant and isolated, unable to participate on the really big projects like taking Musk to task on Mars or like providing a real alternative to NYSE.
It is the need to tap into that economies of scale that in some ways has guaranteed the security and prosperity of the United Europe.
There’s some way to go to achieve it, but Europe has a way to get there. While the United Kingdom now doesn’t have a way to tap into the continental level economies of scale.
That may well weaken the island and perhaps significantly in the years and decades to come, if Europe does manage to unite.
Economically they have, and the benefits of that are shown in the strength of the euro which more and more is becoming a global reserve currency.
While the pound now has less room for maneuver because it can’t quite export its devaluation like the dollar or the euro.
Britain’s lower appeal for skilled immigrants, moreover, was shown this year in its handling of the pandemic, something reflected in Germany being seen as having done a far better job.
UK remains however a significant player, but a lot less than it was because London no longer has the appeal it did as a gateway to Europe.
It is Germany now that has that appeal of being at the centre of things, and the power of influencing an entire continent. Something London counter-influenced by having some influence in both Europe and America.
Yet the British ruling class appears to have decided to have almost no influence at all in Europe, ignoring fully the 48% to implement a clean break even if there is a deal under the current terms.
That’s something that creates a very different Britain. Less the global player, because it just can’t compete in something like the space race for example, and more a lost nation in the temporary American trap of nationalism.
That said, the current choices are not those of the referendum but those of the current British administration. The next one will have to decide for itself just how close they want to be to Europe, with it to be seen whether Boris Johnson will be an exception to this european matter taking down all conservative Prime Ministers.
Just as it is to be seen how much all this will affect bitcoin as Brits wonder whether they should hedge some of their savings ahead of a very different New Year for the island.