City defies the Brexit pessimists
GLOBAL banks have increased the staff they employ in London since the Brexit vote – despite Project Fear pessimists claiming tens of thousands of posts would be axed, figures show.
The referendum vote to leave the bloc sparked concern in the City that jobs would move to the Continent as banks adjusted to restrictions on cross- border financial trading and clients shifted more of their activities to the EU.
But a survey reveals that these fears were unfounded.
In reality, many financial institutions have continued hiring in London and more than half of the largest finance firms have increased their headcount in the last five years.
This was the chief finding of a wide- ranging survey of 24 major international banks and money managers by the Financial Times.
Experts said the results could help to renew confidence that the capital will remain Europe’s dominant financial centre after Brexit.
Rishi Sunak, the Chancellor of the Exchequer, has pledged to allow European finance firms to continue selling to UK clients after Brexit by granting an “equivalence” decision.
Brussels has so far failed to reciprocate, which means London branches of international banks will have to redirect some business to European subsidiaries.
Record
But the discovery that banks continue to employ record numbers in London will provide a boost to the Treasury as financial services employ more than a million people and contributed
£ 76billion in tax receipts last year.
The survey found that Vanguard, the world’s second biggest fund manager, more than doubled its London workforce to 600 as did rival T Rowe Price, which now employs 575 people in the City.
French firm BNP Paribas and its Swiss competitor UBS were among banks to increase their London presence, the survey found.
They were joined by Wall Street giant Goldman Sachs, which last year moved into a state- of- the- art London headquarters boasting amenities such as a climbing wall and lactation suites for staff who are new mothers.
The survey revealed that many firms overestimated the number of jobs they would axe in the capital as a result of Britain leaving the EU and will be seized upon by Brexit supporters as evidence that Remainers were engaging in Project Fear – predicting catastrophic scenarios that were never likely to occur.
A 2017 survey predicted that one in six asset management jobs could move from Britain to the Continent. Several banks expected that thousands of jobs would be cut but the numbers have so far turned out to be far lower.
Just 12 foreign banks reduced their aggregate number of London employees from 71,000 to 65,000 over the past five years but this was driven mostly by global shake- ups at Credit Suisse, Deutsche Bank and Nomura that were not linked specifically to Brexit.