Brexit delivers blow to Britain finance as investments slide

london — Britain’s financialservices industry is suffering a drop in foreign investment while some of its European counterparts enjoy big gains, according to a new study that shows the starkest indication yet of Brexit’s impact on the sector.

Investment from abroad in Britain’s financial-services firms fell 26 per cent last year, EY said in a report released on Monday. During the same period, Germany experienced a 64 per cent increase, while the figure for France more than doubled. London still attracted more inward investment in financial services than any other EU city, but the gap with Paris, Frankfurt and Dublin is narrowing, EY said.

With talks between the UK and EU stalled since March, banks are rushing to establish new trading hubs elsewhere in the region. EU regulators have made it clear they expect banks to establish full-scale, standalone operations inside the trading bloc staffed by significant numbers, as soon as possible. The resignation of UK Brexit Secretary David Davis late Sunday in protest over Prime Minister Theresa May’s plans for a soft exit from the EU only adds to the uncertainty over the direction of government policy.

“UK-headquartered financial services firms need to ensure post-Brexit access to EU markets to safeguard the future of their business,” Omar Ali, EY’s UK financial-services leader, said in the report. — Bloomberg