10,000 financial job losses on Brexit Day 1: Bank of England

— Britain’s finance industry could lose 10,000 jobs on the first day after the country leaves the European Union, the Bank of England warned Wednesday, as it urged the government to swiftly reach a transitional deal to smooth out the process.

Sam Woods, the central bank’s deputy governor for prudential regulation, told a parliamentary hearing that he expected 10,000 job losses on “day one” of Brexit.

That, he said, would represent around 2 percent of the British workforce in banking and insurance, or around 3 percent of those working in or around London.

Many firms in the financial sector are worried about the implications of Britain’s exit from the European Union, which is due in March 2019. Membership of the EU has given firms the ability to automatically sell their products across EU borders and London has become the European hub for many international firms.

Lloyd Blankfein, the CEO of U.S. bank Goldman Sachs, has been vocal in warning that his firm may relocate chunks of his business out of London to Germany’s financial center in Frankfurt.

Other firms are also making contingency plans to set up operations in Europe or moving staff and activities to avoid potential disorderly Brexit, which would involve Britain not coming to an agreement with the EU on matters of trade.

The Bank of England has voiced concerns that many companies will start implementing those contingency plans early next year and has urged the government to agree on a transition deal with the EU to extend current economic and trade relations for at least a couple years after Brexit.

In a speech in September, Prime Minister Theresa May said she was looking for a transition deal of around two years after Brexit whereby Britain would continue paying into EU coffers and would be subject to the trading and regulatory rules that currently apply in the European single market.