The post-Brexit exodus of bankers from the City of London has not come to pass.
The total number of Brexit-related job relocations from the UK to other parts of Europe since the 2016 referendum now stands at just more than 7,000, the latest data from consultancy EY showed. That is a fraction of some estimates made shortly after the vote.
A 2016 report commissioned by lobby group TheCityUK warned that up to 100,000 financial services jobs could be put at risk. Consultancy Oliver Wyman warned of as many as 40,000. Think tank Bruegel said in 2018 that London could ultimately lose 10,000 banking posts and 20,000 roles in the financial services industry.
Photo: Reuters
In the months following the vote, announced job moves soared as high as 12,500, as banks and businesses braced for a chaotic divorce. However, by December last year, the number of expected total relocations had tumbled to 7,400.
The flight of capital out of London has also faltered. While 24 firms have publicly said they would shift just more than ￡1.3 trillion (US$1.7 trillion) of UK assets into the EU since the vote, that figure has remained broadly unchanged over the past 18 months, EY said in its latest — and final — Financial Services Brexit Tracker.
The report does not track how many new jobs the City of London has missed out on as a result of its new status, but it underlines how the worst job upheavals from the UK’s break with the 27-member states have not immediately come to pass in the Square Mile, about 14 months after Britain broke away from the bloc.
“Most firms finalized the majority of essential operational moves well ahead of the 2020 Brexit deadline and were able to serve clients in the UK and EU without undue disruption,” said Omar Ali, EY’s financial services leader for Europe, the Middle East, India and Africa. “While numbers have now stabilized, there will remain a degree of fluidity for some years to come.”
Dublin remains the most popular destination for new European hubs or offices, with 36 financial services firms announcing intentions to relocate UK operations or staff to the city.
Luxembourg is the second-most popular destination, attracting 29 companies in total, followed by Frankfurt with 23 companies and Paris with 21.
When it comes to number of employees attracted, Paris scores highest with about 2,800 UK employees moving to the French capital, followed by Frankfurt with about 1,800 and Dublin with 1,200.
There are concerns that banks might continue to drift away from London if the European Central Bank (ECB) intensifies its scrutiny of their presence in the bloc, Bank of England Deputy Governor Jon Cunliffe said earlier this month.
Cunliffe said the ECB might require some businesses to move back to the EU following its ongoing review of banks’ booking models and trading desks.
The ECB and national regulators are taking a granular look at where banks have key staff and book trades. The aim is to ensure that risks related to EU clients are accounted for in the bloc rather than slipping from their oversight in other jurisdictions.
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