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Apocalypse? No. The City of London has defied talk of a Brexit exodus

·4-min read

IF you’d been asleep for the last two years and were suddenly awakened in the City of London, you could be forgiven for thinking it had suffered an apocalypse.

Cornhill is empty. On the steps of the Royal Exchange building sit only pigeons. Lombard, normally jammed with cabs full of bankers, hosts the odd bicyclist.

Blimey, you might think, all those predictions about what Brexit would do to our financial centre were right.

In reality, almost no one has left, at least no one we care about. They are just at home, for now, poised to resume business as normal. (Deal making, money raising has continued with impressive normality anyway).

The Times today reports figures from the European Banking Authority which puts the number of top bankers that have left London at 95. Not 95,000. Not even 9500.

95. Perhaps we should ring them up individually and ask if they are ready to come home yet.

London still has most of the big hitters and remains Europe’s biggest financial centre by some way.

The folk predicting the City of London’s demise post Brexit – a curious alliance of centrist remainers, The Guardian, and other people who don’t know what they are talking about – look embarrassingly wrong.

Here is a flashback to The Groan in December 2017:

“City firms plan to move 10,500 jobs out of the UK on “day one” of Brexit, with Dublin and Frankfurt the financial centres most likely to benefit from the UK’s departure from the EU.”

The paper was quoting accountants at EY – that 10,500 already being a reduction on previous guesses of 12,500.

Some estimates were far more serious than that.

Of course, some jobs have moved. But they always do – it is a dynamic world, and for some basic functions involving share administration or fund allocation, it has been cheaper and as easy to do that from Dublin or Frankfurt for ages.

City old timer David Buik of Aquis Exchange says: “Predictions that post Brexit, 100k banking personnel would leave for the EU was wholesale exaggeration. 75 years of infrastructure with the best lawyers and accountants plus the English language endorses the belief that London will remain at the pinnacle of financial society.

The idea that there would be a mass exodus by bankers was always insanity. Yes, Euro based trading was always likely to be repatriated, and so it was in a heartbeat. For foreign exchange, the finance of foreign trade, M&A activity and derivatives, apart from New York, there is only one financial metropolis - London. The centre of the time zone, the English language, deal making prowess and 75 years of infrastructure makes London an irresistible centre.”

Back in February there was a kerfuffle when Amsterdam, temporarily, surpassed London as the biggest share trading hub in Europe.

This was symbolic only, it meant little for jobs or taxes, and the stock market is just a fraction of what the City is about anyway.

When London regained its status from Amsterdam shortly thereafter, the embarrassingly wrong crowd somehow failed to notice.

Russ Mould at AJ Bell says: “Perhaps COVID has wrecked more than a few plans to move staff around, but so far the doom-laden predictions are not coming true. Firms are focusing on keeping the talent they have, and threatening to shunt them around Europe might not be a good way of doing that. People can have good reasons for wanting to stay where they are, such as children and their education, as well as their own professional and social networks, let alone the prospect of different (higher) tax regimes.”

The truth is that London is just better at this stuff than almost anywhere else. Moreover, Amsterdam and the rest know it.

Think of them as Margate, annually making a claim to get our holiday pounds over the charms of Majorca. They don’t actually expect us all to show up.

And they couldn’t cope if we did.

Here is the other thing about the City and London in general, as compared to say Frankfurt, a village of a town that has a nice book fair but may otherwise lack for the excitement your hard swinging financier regards as his due.

It is fun.

You don’t have to like the people who work in the City to see that what they do is vital to the UK’s prospects.

And in any case, they represent a far broader cross section of the human race than might be supposed from the outside. Most of life is here.

The City has had a good crisis. And it is just about to get even better. Watch.

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