Britain will lose its status as Europe’s top financial center unless it keeps borders open to specialist staff, improves infrastructure and expands links with emerging economies, TheCityUK said in a report published yesterday.
The report from Britain’s most powerful financial lobby group said continental Europe might eventually become the preferred destination for banks, insurers and asset managers as they relocate business there to retain access to the EU single market.
Although companies might begin by initially shifting a small number of jobs to Europe, this might begin to accelerate when property leases expire, they carry out business reviews or when the cost of capital becomes uneconomical.
“Shifts out of the UK may gradually erode the ‘cluster effect’ of the financial ecosystem, with the threat of a tipping point in the ecosystem being reached,” the group said in an 83-page document outlining how the industry could thrive over the next decade.
Securing a favorable deal for financial services from the Brexit negotiations is one of the biggest challenges for the UK government, because it is its largest export sector and biggest source of corporate tax.
Britain’s finance industry could lose up to ￡38 billion (US$49 billion) in revenue in a so-called “hard Brexit” that would restrict its access to the EU single market, according to some estimates.
The report said the government must ensure businesses can recruit people to fill skill gaps and must simplify the process of getting a visa.
Brexit has already made it harder to attract people to Britain, and the government is introducing policies making immigration more restrictive and expensive, the report said.
It said the cost of hiring an employee on a five-year visa has risen by 250 percent to ￡7,000 over the last year and the minimum salary at which a business may recruit staff on a visa has risen by almost half since 2015.
Aside from Brexit, the report also looks at broader issues that threaten the competitiveness of the City of London as a financial services hub, including a need to invest in transport networks and technology.
It calls for government and financial services to work together closely to develop international trade policies, and to improve the country’s digital and physical infrastructure, including speeding up travel times between airports and different financial centers around Britain.
One financial services industry veteran who had independent access to the report said it lacked urgency and there was too little on the impact of Britain leaving the EU, given that “Brexit is a catastrophe for the City.”
Former financial secretary to the Treasury and city minister Mark Hoban, who chaired the report, said that Brexit was only one of several challenges facing financial services.
“The challenges facing financial services are much more than just about Brexit. It is about emerging financial centers and also, to a degree, about unmet needs in the UK as well,” Hoban told reporters. “There is a very clear appetite to tackle these issues at various levels of government.”
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
RSS