Financial services firms operating in Britain have shifted roughly 7,500 employees and more than £1.2 trillion of assets to the European Union ahead of Brexit – with more likely to come.
Close to 400 relocations were announced in the last month alone, according to consulting firm EY. Since Britain voted to leave in 2016, the finance industry has added 2,850 jobs in the EU – with Frankfurt, Luxembourg and Dublin the biggest beneficiaries.
When Britain formally cuts ties with Brussels on 31 December, London will lose its passport to offer services across the EU, having to rely on the bloc granting the UK ‘equivalence’ to do business in the region.
With relations between the EU and the UK fraught at best, and a trade deal looking less likely, there is no guarantee that is granted – spurring firms to beef up their presence on the continent.
‘Wait and see’
“As we fast approach the end of the transition period, we are seeing some firms act on the final phases of their Brexit planning, including relocations,” Omar Ali, UK financial services managing partner at EY, said.
“This is despite the pandemic and consequent restrictions to the movement of people.” Many firms are still in a “wait and see” mode, and further moves could follow soon, he added.
JPMorgan has recently moved assets and staff, while Goldman Sachs reportedly is planning to move a further 100 people to Europe.
24 firms with itchy feet
Before Brexit think-tank Bruegel estimated that London could lose 10,000 banking jobs and 20,000 roles in the financial services industry – which is yet to happen.
However the EY report noted that as many many as 24 financial services firms have said they will move assets out of Britain, as the nature of the City of London’s access to the EU is shrouded in uncertainty.