Experts had predicted 5,766 people would be moved in the event of a no-deal Brexit in the last survey in September. But a new survey published by Reuters today suggested about 2,000 roles are expected to have moved or been created overseas even as the risk of a disorderly exit grows. This new estimate is about a fifth of the 10,000 flagged in the first survey in September 2017.
The survey findings suggest London, which has the largest number of banks and the largest commercial insurance market in the European Union, is likely to remain the region’s centre of international finance.
Many bankers and politicians predicted Britain’s vote to leave the European Union in a 2016 referendum would prompt a mass exodus of jobs and business and deal a crippling blow to London’s position in global finance.
A no-deal Brexit would mean Britain leaving the European Union without an agreement on trade.
Currently, the UK is on track for such a scenario because Prime Minister Theresa May’s deal giving London and Brussels a 21-month transition period to negotiate a trading relationship is at risk of collapse.
The predicted exodus of jobs from the City has so far failed to materialise
Most bankers, however, are confident a compromise will be hammered out, and are are waiting to see what will be agreed and what the relationship will be, before making any final decisions about relocations.
The survey results are based on answers from 132 of the biggest or most internationally-focused banks, insurers, asset managers, private equity firms and exchanges to a survey conducted between January 3 and January 28.
The jobs are equivalent to 0.5 percent of the 400,000 people who work in financial services in London.
Meanwhile, top investment banks plan to hire far more people in London than anywhere else in Europe, indicating they expect Britain will remain their main regional hub, at least in the short term, a separate Reuters survey showed.
Catherine McGuinness said the City would “find a way to thrive”
Catherine McGuinness, chairwoman of the City of London Corporation’s Policy and Resources Committee, said: “It will be a slow burn. We won’t know what the full impact will look like for at least 10 years.
“But the City is always changing and it will find a way to thrive.”
The decision to leave the EU has jolted London’s finance industry, which has been a critical artery for the flow of money around the world for centuries.
Banks and insurers in Britain currently enjoy largely unfettered access to customers across the bloc in most financial activities. Elements long taken for granted, such as the right to buy and sell products in a single market, are suddenly in flux.
Theresa May is struggling to get her deal through the Commons
Under a worst-case no-deal scenario, consultants Oliver Wyman predicted as many as 75,000 jobs could go, while the London Stock Exchange suggested two years ago that figure could be as high as 232,000.
Large investment banks are expected to have moved about 890 jobs, just under half the number expected by end-March, according to interviews with more than two dozen industry sources.
Bank of America is moving about 200 employees to Paris by the end of February, according to sources. The bank declined to comment.
But many other finance companies are holding off staff moves until the political situation becomes clearer.
HSBC, which has publicly said up to 1,000 jobs could move to Paris, has so far not moved any staff, according to a source at the bank.
Royal Bank of Scotland, which said it could move 150 employees to Amsterdam, also has not moved any employees, a source at the bank said.
Reuters approached 169 banks, asset managers, insurers, ratings agencies and exchanges with UK operations on their plans and received answers from 132, against 134 in September.
The numbers of respondents are different because some companies who responded in September did not do so this time, while others were included in the survey for the first time.
The first Reuters survey in September 2017, which collated answers from 123 firms, indicated 9,777 roles would be affected.