Brexit moved to EU much lower than expected

Far fewer jobs in financial services based in the UK have relocated to the European Union than originally anticipated in the wake of the Brexit referendum almost six years ago, according to the latest survey.

David Sapsted

29 March 2022

Immediately after the vote in the summer of 2016, City firms said they would be moving 12,500 jobs to European hubs because of the expected loss of London-based organisations' ability to operate in the EU.Some analysts even predicted up to 100,000 UK jobs could eventually be lost.

Now, the latest EY 'Financial Services Brexit Tracker' shows that only just over 7,000 post have actually relocated or are in the process of doing so.

Moving staff overseas decrease due to new agreements between UK and EU

EY said that many firms had initially projected high numbers of staff moves to Europe amid fears of losing access to the single market. Now, however, many had revised down the number of relocations following agreements between the UK and EU on operating models.

Omar Ali, Europe, Middle East, India and Africa financial services leader at EY, said: “In the months following the referendum, financial firms voiced their intentions to bolster EU subsidiaries, move staff abroad and relocate headquarters in preparation for all possible scenarios.

"The high number of potential job relocations reported in 2016 aligned with the uncertainty which surrounded the City’s ongoing relationship with Europe at the time.

“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.”

Mr Ali said that cross-border access remained a priority for both UK and EU firms as they looked to create the most efficient, liquid markets offering end users the best choice and prices.

But, he added: "Overall, Brexit-related decisions are increasingly becoming integrated into businesses’ broader operational considerations in line with their wider growth and transformation strategies."

The Brexit Tracker showed that the principal winners of Brexit-related moves from London had been Paris (2,800 jobs), Frankfurt (1,800) and Dublin (1,200).

New hires on the rise in London

Conversely, the number of new hires that have been publicly linked to Brexit since the referendum currently stands at 2,900 across the EU and 2,500 in the UK, with London recording the largest rise in the past three months.

EY said the situation over the future movement of jobs remained fluid with further relocations possible as a result of current European Central Bank checks on whether new EU hubs opened by London-based banks had enough staff to justify their new licences.

Mr Ali commented: “When it comes to cross-border access outside of the EU, the UK has signed a number of trade deals over recent years with key markets including Australia and Japan.

"The data provisions in these agreements will help underpin an increase in cross-border financial services. More significant is the proposed financial services mutual recognition deal with Switzerland, which has the potential to become a gold standard template for other jurisdictions to replicate.

"When it comes to the future of global financial services, I have no doubt that both the UK and EU will continue to be world-leading markets, driving innovation, progress and growth."

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