08/02/17

Country: UK. UK could lose 30,000 banking jobs after Brexit

Brussels-based research group Bruegel forecasts up to 17% of the UK banking system could choose to move away from Britain as its exit from the European Union threatens their trading activities, according to Bloomberg.

Following discussions with market participants, the researchers estimate 35% of banking activities in London are conducted with customers within the EU.

As the UK heads for a 'hard Brexit', which will likely put an end to passporting across the bloc, many of these global banks could be forced to move their operations to European countries to continue conducting business.

The report said banks and their clients are particularly worried about a "cliff edge" Brexit deal, where all access to the market is cut off once it is implemented.

It suggests a number of banks are already in talks with EU regulators about moving headquarters and are said to be prepared to begin the process within weeks of Article 50 being triggered, expected to happen by the end of March.

What could be the long-term implications of Brexit for the City?

The researchers, led by Andre Sapir, said in the report: "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."

The thinktank estimated London-based financial firms will have to move around 10,000 staff to the new European locations, while 18,000-20,000 associated professionals such as lawyers and accountants may also have to relocate.

The report comes after TheCityUK lobby group predicted some 35,000 banking jobs could be at risk, with the number doubling when associated financial services jobs are included.

A number of UK-based firms, such as the London Stock Exchange, JP Morgan and HSBC, have already talked about plans to move staff away from the London hub as a result of Brexit.