Banks lower estimates for City jobs they need to relocate due to Brexit
The number of finance jobs to be shifted out of Britain or created overseas by March 2019 due to Brexit has dropped by half compared to six months ago to 5,000 roles, according to firms employing the bulk of UK-based workers in international finance.
A Reuters survey of 119 firms, following up on a survey published in September 2017, found that Paris has overtaken Frankfurt as the most popular destination for the new roles.
Some banks lowered the estimates for jobs they need to move as they consider more carefully how much of their operations they will need in the European Union if Britain loses access to the bloc’s single market, the survey found.
A more conciliatory tone toward the finance sectors from British Prime Minister Theresa May’s government and progress in talks with the EU have also had an effect.
The findings suggest London will comfortably remain Europe’s largest financial centre, at least in the short term, boosting supporters of leaving the EU, who say the threat of job losses from one of Britain’s biggest industries was exaggerated.
Executives and politicians predicted a mass exodus of finance jobs from London to rival centres in continental Europe after Britain voted to quit the EU in the summer of 2016.
“The idea of London’s demise was overdone, because it will retain most of the advantages that made it a great financial centre,” said Peter Hahn, a professor of banking at the London Institute of Banking and Finance.
The September survey, which found that they planned to move or create 10,000 jobs on the continent by Brexit Day on March 29, 2019, was also as at the lower end of estimates by industry lobby groups and financial firms.
The future of London as Europe’s financial centre is one of the biggest issues in Brexit talks, because it is Britain’s largest export sector and biggest source of tax. Rival cities within the bloc are battling to draw highly paid banking jobs and the revenues they bring.
International finance firms are building up operations in the EU to ensure they can continue to serve clients if their London operations lose the ability to operate across the bloc – known as the EU financial “passport” – once Britain leaves.
Britain and the EU agreed on March 19 to a transition period of 21 months to give time for talks on future trade ties. The deal eases concerns about a hard Brexit but must still be approved by Parliament in a vote expected later this year.
Several banks said they had scaled back their estimates since the last survey was published.
Deutsche Bank, which had originally examined moving up to 4,000 staff from London, will now initially shift fewer than 200 jobs, according to the survey.
UBS plans to move 200 staff to Frankfurt from London after previously indicating as many as 1,500 jobs would move, the survey shows.
Goldman Sachs, which had considered moving about 1,000 people, now expects to move fewer than 500, it found.
The survey indicated 4,798 banking roles would be affected. Many of those would be shifted out of the UK, but some would be new roles in Europe, the executives surveyed said.
Previous forecasts for job losses in a hard Brexit scenario have ranged from about 30,000 roles, estimated by the Brussels-based Bruegel research group, to as many as 232,000 by the London Stock Exchange.
In a surprise development, Paris has emerged as the biggest winner in the fight for London-based banking jobs that may be moved to cities in the EU after Brexit, the survey found. France’s capital is on course to gain 2,280 roles, the survey showed.
Many large finance companies were initially deterred by a perception of France as a country of high taxes and strict labour laws, according to executives.
But efforts by President Emmanuel Macron, a former investment banker, to woo the industry by making it easier to hire and fire and cutting taxes on salaries, wealth and capital income appeared to be paying off.