Fewer City jobs to go to EU than feared, claims BOE

BANKS, insurers and other finance companies will need to move fewer jobs than feared on Brexit day, the Bank of England believes.

It had expected between 5,000 and 10,000 jobs would be relocated to the EU as a result of Britain’s departure from the bloc. But now Sam Woods, a deputy governor of the Bank and head of the Prudential Regulation Authority, believes it could be fewer. “We have had an estimate for some time now of 5,000 to 10,000 jobs, which you can think of as 0.5pc to 1pc of jobs there are in this country in the relevant sector – so, a relatively small move on day one,” Mr Woods told Bloomberg.

“I think it will be at the bottom end of that range. If anything, it might be slightly below that.” The impact of Brexit on financial services will depend on the deal reached between the Government and Brussels.

British regulators were keen to replace the current passporting system for banks in the EU with a system of “mutual recognition”, under which regulators in both jurisdictions acknowledge each other’s regimes are suitably robust and so let companies access customers and clients across borders. But Brussels prefers a scheme known as “equivalence” in which Uk-based financiers can only access EU markets or offer crossborder contracts if British regulations shadow the EU’S.

If rules change and the UK is not deemed to have stuck close enough to those on the continent, authorisation to do business can be withdrawn with a 30-day notice period. Philip Hammond, the Chancellor, deemed this “wholly inadequate”.