Yahoo Finance UK financial services firms have spent £4bn on Brexit preparations
UK financial services firms have said that they have spent almost £4bn ($5.07bn) preparing for the UK’s departure from the European Union, according to consultancy firm EY.
The figure includes £1.3bn spent on relocation costs, legal advice, and contingency measures since the 2016 Brexit referendum — as well as £2.6bn in capital injected into bases outside of the UK.
The £4bn figure accounts only for the spending that companies have publicly disclosed, which means that the true cost of Brexit preparations in the UK financial services sector is likely to be much higher, EY said.
At 7,000, the total number of employees that firms plan to relocate remained steady in the last quarter, as did the £1tn in assets that they have said they will shift out of the UK.
While EY said the last three months saw “most firms to some extent pause their Brexit planning,” it noted that some firms had “restarted” their Brexit preparations in recent weeks.
It also said that it expected preparations for a no-deal “to increase markedly throughout the summer.”
The proportion of firms that have said they will move either staff or some aspect of their operations from the UK to elsewhere in Europe increased marginally in the past three months, from 39% to 41%.
Dublin remains the most popular post-Brexit location. Some 29 companies have said that they are either considering or have confirmed moves to the Irish capital.
At 23 companies, Luxembourg has jumped to second place, while Frankfurt follows closely behind on 22.
Brexit is beginning to impact the bottom lines of companies, said Omar Ali, who leads the financial services division at EY.
“Capital deployed for supporting new non-UK headquarters is value which is not being returned to shareholders or reinvested in UK businesses. Over time some of this capital may flow back to the UK, but currently is a net loss for our economy,” Ali said in a statement.
