Assets to leave London ahead of Brexit top £1tn

Canary_Wharf_banksThe City of London is on track to lose 7,000 financial services jobs in the “near future” because of Brexit while £1 trillion (€1.16 trillion) of assets are transferred to financial centres in the European Union, according to a report by the EY consultancy.

The firm’s most recent Brexit Tracker report warns that financial services firms have stepped up contingency plans for an increasingly likely ‘no-deal’ exit from the EU next week and job relocation away from the Square Mile is rising.

The quarterly report, which tracks the intentions of 222 UK-based financial services firms, found that 23 companies have so far announced transfers of assets from the UK to Europe.

But the total assets transferred could be substantially greater than £1 trillion as not all the firms surveyed by EY have publicly declared how much they have transferred.

Among those firms to have declared their asset transfers, the figure has risen to £1 trillion, up from £800 billion three months ago.

The report also found that:

  • The number of companies that have confirmed a specific number of potential staff moves from the UK have increased 30% to 39 up from 30.
  • Since the EU referendum, 63% (30 out of 48) of universal banks, investment banks and brokerages have said they are considering or have confirmed relocating operations and/or staff to Europe.
  • Dublin remains the most popular location with 28 companies saying they are considering or have moved operations and/or staff. However, the gap has narrowed between the number of companies confirming Frankfurt (21), Luxembourg (19) and Paris (18).
  • Across Europe, in addition to the 7,000 roles relocating from the UK, more than 2,300 new jobs have been created which are attributable to Brexit.

Omar Ali, UK financial services leader at EY, said: “Continued uncertainty will undoubtedly lead to more assets and people being transferred from the UK and not necessarily to the EU.”

“With only three paragraphs on financial services in the political declaration about the future trading relationship with the EU, it is critical that politicians focus on achieving an orderly exit and then secure a future trading relationship that adequately covers financial services.”

The report warned that the relocation of 7,000 highly-paid finance jobs will “inevitably” hit UK tax receipts with a direct loss of at least £600 million a year.

Twenty-eight asset managers are considering moving or have confirmed that they are moving operations and/or staff to Europe from the UK. 14 asset managers have confirmed Dublin, while 10 have chosen Luxembourg.

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