Brexit has cost City 7,500 jobs and £1.2tn

Survey suggests London financial job relocations have been hampered by coronavirus   

Brexit has cost City 7,500 jobs
Lights dim on London.

(ATF) Firms in the UK’s financial services sector have shifted 7,500 jobs overseas on concern Brexit will disrupt their activities in Europe.

A report by professional services firm EY said 2,850 new jobs had also been created overseas and not the City. Based on public declarations by 24 companies, EY estimated that about £1.2 trillion ($1.52tn) of assets had also been lost in the process.  

EY has been tracking job losses from the City since the day before the UK referendum on leaving the European union in June 2016. It said that with three months to go until the UK leaves the bloc, the number of firms that have publicly said they’d transfer jobs out of the country had risen to 88. 

Financial services firms are worried that Brexit – especially without a formal severance agreement – will cut their UK businesses out of the lucrative euro-denominated trade, which makes up a huge chunk of activity in London.  

The UK’s negotiations on leaving the EU are nearing a crunch point. UK Prime Minister Boris Johnson said a deal on tariffs and trade with its former partners must be agreed this month if a chaotic no-deal Brexit is to be avoided. However, the EU has begun suing the Westminster government over threats to go back on parts of a divorce agreement signed last year, increasing the the risk of a disorderly departure at the end of the year. 

ECONOMY: Global banks prepare for possible US election chaos

UK financial services managing partner at EY Omar Ali said uncertainty over future trading arrangements meant companies were in a “wait and see” holding pattern that may yet see more jobs lost overseas.

“We are seeing some firms act on the final phases of their Brexit planning, including relocations,” Ali said. “This is despite the pandemic and consequent restrictions to the movement of people, which is clearly making it harder to relocate people and adds complexity for those who were looking to commute to EU locations.

“The pre-trade agreement, set to be finalised at the end of October, means we could yet see a flurry of further staff and operational announcements in the weeks that follow,” he added.

Dublin had been the most popular choice for relocated jobs, followed by Luxembourg, EY said citing its Financial Services Brexit Tracker.