Sunday 18 February 2018

First wave of Brexit moves 'will cost London 10,000 finance jobs'

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Andrew MacAskill, Simon Jessop, and Carolyn Cohn

Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to Europe's single market, according to a Reuters survey of firms employing the bulk of workers in international finance.

Frankfurt was by far the most popular destination for the new roles, the survey showed, with Paris a distant second. Dublin has also seen some activity.

The results from 123 firms came from the first comprehensive public survey to ask the biggest banks, insurers, asset managers, private equity firms and exchanges in Britain about the specific details of their plans so far in case of a hard Brexit.

Canvassing was conducted by email and telephone interviews between August 21 and September 15, weeks after companies submitted detailed plans on their Brexit preparations to the Bank of England as required on July 14. The bank declined to comment on the results of that survey.

Nearly half of the companies surveyed told Reuters they would have to move staff or restructure their businesses because of Brexit, which is due to take place in March 2019. Another third said it would have no impact, and the remainder said they were still deciding on their plans or declined to comment.

The number of jobs to be moved or created overseas was based on answers from 39 companies employing at least 350,000 people. About 1.1 million people work in Britain's financial sector.

The findings suggest that the first wave of job losses from Brexit may be at the lower end of estimates by industry lobby groups and firms, which could mean London will keep its place as the continent's top finance centre, at least in the short term.

Most respondents said bigger moves could be in store in a decade or more, however.

"If it is going to happen it won't be in one big bang," said a senior executive at one of Europe's largest banks, which took part in the survey. "There will be a slow drain of jobs from London over a number of years."

The survey also suggests some financial institutions may be delaying decisions, hoping a soft Brexit can be negotiated in talks currently going on in Brussels.

BoE Governor Mark Carney has specifically warned companies against that approach, saying it's important to start planning now.

"They would like to think there is going to be a mutually easy way of dealing with financial services across the EU-UK border, so firms are finding it hard to land on precise plans," said Andrew Gray, global head of Brexit for financial services at PwC. (Reuters)

Reuters

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