London loses over 7,000 jobs to EU and more could follow

More than 7,000 finance jobs have moved from London to the European Union as a result of Brexit, down from 7600 a year ago and 10,500 in March 2017, according to EY’s latest Brexit tracker.

This is much less than the job losses predicted in 2016 when Britain voted to leave the bloc.

Some of the remain lobby warned that tens of thousands of City jobs could be lost to Paris, Amsterdam, Brussels and other even smaller financial centres places such as Luxembourg.

PwC predicted in April 2016, before the referendum, that as many as 100,000 financial jobs could go.

However, while EY noted that many “worst-case-scenario” contingency plans have not been enacted, the firm anticipates ongoing operational, and staff moves from financial firms across Europe as “Brexit increasingly becomes part of a broader conversation about strategic business drivers and operating models.”

EY said that new local hires linked to Brexit total 2,900 across Europe, and 2,500 in Britain, where just over a million people work in the financial services sector.

The firm said, further relocations could result from European Central Bank checks on whether Brexit hubs in the EU opened by banks which used London as their European base have sufficient staff to justify their new licences, EY said.

The Bank of England is scrutinising these to avoid banks in London being left with too few senior staff.

“Staff and operational moves across European financial markets will continue as firms navigate ongoing geo-political uncertainty, post-pandemic dynamics and regulatory requirements,” said Omar Ali, EMEIA financial services leader at EY,.

Ali added: “As firms gained greater clarity on what the post-Brexit landscape would look like, plans were consolidated and, in some cases, firms revised down the number of people they would need to relocate.”

The rise of Covid may have also had an impact , leading financial service firms to think twice about their plans.

In terms of locations, Paris was the winner, attracting around 2,800 UK employees, followed by Frankfurt at roughly 1,800 and Dublin with 1,200.

Dublin was the most popular location of choice for operational moves with Luxembourg coming in second.

Overall, the transfer of assets from London to EU hubs remains around £1.3 trillion, EY said, adding that Brexit staff moves are by now part of a broader view of strategic business drivers and operating models.

Market participants believe that in the longer term, it may not make commercial sense to have big hubs in London and the EU.

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