Sunday 25 March 2018

Brexit Briefing: City of London job fears recede amid 'positive signs' for sector

Catherine McGuinness
Catherine McGuinness Business

Britain's vast financial services industry will suffer far fewer job losses from Brexit than first feared, the City of London's policy chief has said, in remarks that will boost Leave supporters who say the threat has been exaggerated.

Catherine McGuinness said the outlook had brightened after the UK and the EU agreed to the principle of a transition deal and to talks about future trade. The industry also feels it is getting more of a hearing from Theresa May's government. "The signs are positive, it is clear that the government is not only listening, but has understood our position," McGuinness said. "But now we have to persuade the EU27 to strike a deal which works for this sector." Britain has stepped up its defence of the industry, which accounts for 12pc of output, recently. May told bankers she will put the sector at the heart of a trade deal.

McGuinness also said the Bank of England's offer to allow European bank branches in London to avoid a costly conversion into subsidiaries is an indication Britain will remain open to foreign investment. The numbers of finance jobs that may be shifted out of Britain are now likely to be at the lower end of estimates.


Pound 'weak' despite high

The pound touched a new post-Brexit vote high against the dollar on Friday with investors clamouring to go long, as analysts urge caution.

While sterling has seen a recovery, in reality it is more about the dollar, according to Societe Generale strategist Kit Juckes. In sync with sterling's strength, the global reserve currency has fallen more than 2pc since the start of January. "I look at the trade-weighted chart and the pound really hasn't moved up from the bottom of the long-term range. It's still very weak," said Juckes.


Citigroup in Frankfurt dash

Citigroup is planning to have its new broker-dealer in Frankfurt up and running by year-end in case the EU exits the EU with no trade deal or transition agreement.

It is talking to regulators about moving some customers' investment activities from London to Frankfurt, Citibank Europe head Zdenek Turek said.

The bank plans to relocate around 150 roles, with many hired locally. "We assume that there will be no transition period so we have to be ready," Turek said in Vienna.


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