Why Brexit is worse for Europe’s economy than it is for ours

Share prices in freefall. Pension funds obliterated. A sea of red ink across trading screens. Billions wiped off the value of leading companies. And brokers, or at least the automated trading algorithms that have replaced them, contemplating throwing themselves out of the window, or whatever exactly it is that an algorithm does when it has a really bad day at the office. That is surely an accurate description of the City of London this morning.

Except, er, is isn’t really. In fact, as the financial markets wake up to an outcome they had planned for but never really expected, something far more interesting is happening. True, the FTSE-100 has taken a hit, and bank shares look about as popular as Jean-Claude Junker at a UKIP rally, but on the whole the losses in London have been fairly modest. It is Madrid, Milan, Paris, and Frankfurt that are tanking. The reason? While there will be a short-term hit to the British economy, it will be the rest of Europe that suffers far more from this than us – and investors have already figured that out.