Ever since Britain voted to leave the European Union on June 2016, banks and businesses have warned that they would move operations and jobs to other EU states, in order to safeguard against the ramifications of Brexit.
According to a new report by think tank New Financial, 275 firms have “moved or are moving some of their business, staff, assets or legal entities from the UK to the EU to prepare for Brexit.”
The report’s authors said: “These moves are the inevitable consequence of Brexit. The political uncertainty since the referendum and failure to reach a deal has forced firms to prepare for the worst and put their contingency plans into action. Much of the damage has already been done and for many firms, Brexit happened sometime last year.
“This shift will chip away at London’s position as the dominant financial centres in Europe; increase cost, complexity and risk in European financial services; reduce the UK’s influence in the banking and finance industry at a European and global level; and hit tax receipts and exports in financial services.”
The cities that have supped up those relocations are:
- Dublin, Republic of Ireland (100)
- Luxembourg, Luxembourg (60)
- Paris, France (41)
- Frankfurt, Germany (40)
- Amsterdam, the Netherlands (32)
New Financial say this has resulted in 5,000 expected staff moves or local hires and that figure is expected to rise in coming years.
This falls neatly in line with other reports that have recently scaled back estimates over jobs lost to Brexit. Investment bank Nomura said in a major Brexit note sent to clients: “The largest investment banks continue to decrease the amount of projected employee relocations.”
In total, Nomura said it now expects 10,000 UK financial services jobs to be at risk of relocation due to Brexit. That is double the Bank of England’s estimate for “Day One” job losses but well below earlier estimates from consultancies such as Oliver Wyman and EY. Reuters estimated in September that just 630 roles had been relocated as a result of Brexit.
While some may think the number of jobs being lost to Brexit do not seem that big of a deal, it’s the shift in underlying business that “is more significant than headlines about the number of staff,” said New Financial.
“Our conservative estimates show that banks and investment banks are moving around £800bn in assets; asset managers have so far transferred more than £65bn in funds; and insurance companies have so far moved £35bn in assets,” the authors of the report said.
“There is a wide range in how different sectors have responded: for example, nearly half of asset managers, hedge funds and private equity firms in our sample have chosen Dublin, while nearly 90% of firms moving to Frankfurt are banks or investment banks.”