London
London
Anastasia Moroz

Anastasia Moroz

Staff writer and journalist at Finbuzz.com
Anastasia is a staff journalist and editor at Finbuzz covering finance, banking and technology.
Anastasia Moroz

London certainly deserves the status of the best city in the world but UK’s vote to exit from the EU puts the capital’s stellar image in jeopardy even if no drastic changes happen immediately.

PwC, in cooperation with BAV Consulting, interviewed 5,200 people from 16 countries asking them what, to their mind, the best cities in the world are.

London became the leader of the 30 best cities in the world ranking after the surveyed scored the capital highly across 40 metrics, including influence in terms of economics, politics, infrastructure, as well as entertainment, culture and great food.

Matthew Lieberman, a director at PwC, stated that Brexit could undermine the image of London as an open city and this might affect the country overall.

“London scores number one in the metric ‘connected to the rest of the world,’ number two in political influence and number two in being a leader; these attributes are contributing to London’s position as the number one city overall – but they could foreseeably be impacted by Brexit,” said Lieberman.

“We’ll have to see if it manages to keep the same ranking next year, or if, due to Brexit, we see a slip. We do not currently have empirical data on this, but based on judgment and anecdotal evidence, we would presume that there’s still a lot of uncertainty and perceptions are in flux.”

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People changing their perception of London after Brexit might not seem like a big deal, but according to PwC’s report entitled Empowering city brands: Bridging the perception and reality divide, image has a considerable effect on a country’s economy.

Deborah Bothun commented: “Our study shows that city per capita GDP and perceptions of the city are closely tied – with a 65% correlation between per capita GDP and a city’s score in Best Cities. With an R-squared (explanatory power) of 43%, this hints at the fact that perceptions are a big driver of City GDP.”

“We also know that cities are a big component of country GDPs. The report notes, for example, that cities account for 90% of the GDP of the US.

“City and country brands are very closely tied, so improving perceptions of a city will also improve perceptions of the country. For example, we found that Rio de Janeiro and  Brazil are perceived to be very similar on the dimensions that define country and city brands (97% correlation), same with country/city combinations like Australia and Sydney (96%) , Japan/Tokyo (94%).”

If people start viewing London as less-welcoming, it might inflict damage upon the city’s position in the rankings, and that is where the risk arises.

Theresa May announced her plan to trigger Article 50 and start the official two-year negotiations the UK to leave the EU in 2017. Sterling has been suffering a record 31-year low since June 23 when Britons voted in favour of Brexit, while companies and banks are seeking to shift jobs to Europe.

So, even though no physical changes occurred, changing perceptions might result into shock waves spreading across the country.

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