Think tank predicts 30,000 London jobs will relocate
London Stock Exchange CEO Xavier Rolet has said Brexit would likely see 232,000 jobs leaving the UK, while a recent study predicts up to 30,000 financial services jobs will move from London to the EU.
According to a study by Brussels-based research group Bruegel.Up to 30,000 banking and other financial services staff could relocate from London to continental Europe after the UK leaves the European Union.
Passporting rights change could result in UK losing £1.6 trillion of bank assets
The respected think tank also estimates that the likely loss of the passporting rights that currently allow London’s financial sector to operate freely throughout Europe will result in the UK losing £1.6 trillion of bank assets. According to Bruegel, international companies currently based in London will have to relocate around 10,000 employees to continental offices following Brexit with a further 18,000-20,000 jobs moving in related fields to the financial sector will also leave London. Based on discussions with market participants, the think tank estimated that 35 per cent of wholesale banking activity in London could be assigned to dealings with customers inside the EU.“At a minimum, it is expected that the new EU27-based entities will need to have autonomous boards, full senior management teams, senior account managers and traders, even though much of the back-office might stay in London or elsewhere in the world,” said the report.
- Tenth of companies eyeing some post-Brexit relocation
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- ‘Huge risk’ in relocating derivatives warns Mark Carney
Bloomberg points out that these estimates are conservative – others predict many more jobs to be lost
Bloomberg pointed out that, “Bruegel’s estimates are at the conservative end of the spectrum. TheCityUK industry lobby group predicts as many as 35,000 banking jobs could be relocated, rising to 70,000 when including associated financial services. London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet has said Brexit would likely see 232,000 jobs leaving the UK.”If Europe’s financial markets – currently centred in London – fragment across the 27 EU nations, then borrowing costs would likely increase as banks seek to offset the higher expenses, the study said. That could cost households and corporates within the EU an extra €6bn to €12bn annually, or up to 0.1 per cent of regional output, the Bruegel researchers estimate.”According to a recent report prepared by Oliver Wyman for TheCityUK, the UK financial sector generates as much as £205 billion of revenue annually and employs 1.1 million people.
EU cities on charm offensives to lure jobs from London
Various European cities, including Paris, Frankfurt, Dublin and Amsterdam, are currently involved in charm offensives to lure jobs from London but, in a twist announced on Wednesday, Sadiq Khan, the mayor of London, said he will embark on a ‘Brexit grand tour’ of five European capitals to make the case for London as a business hub. The six-day tour of Brussels, Paris, Berlin, Madrid and Warsaw will include meetings with politicians, city leaders and business chiefs in a bid to boost economic and cultural ties.“I want to take the message directly to Europe that London will always remain open to engaging, trading and doing business with our friends across the continent,” Mr Khan said. “Our connections on the continent are more important than ever before and, regardless of Brexit, we will continue to work closely together for our mutual benefit.“I vowed to be the most pro-business mayor this city has ever seen and it is vital that we demonstrate to our partners overseas that, despite Brexit, we remain open to business, investment, talent and ideas.” London will remain the best place in the world to do business and our collaboration with other major European cities won’t cease.”
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