Since the UK’s EU referendum in 2016, companies comprising the UK’s financial service sector have announced a transfer of assets out of London totalling £800 billion, according to a report from multinational professional services firm EY.
The report tracked 222 UK-based firms and shows that 36% of companies have publicly confirmed, or stated intentions, to move some operations and/or staff from the UK to Europe, a 5% increase from November 2017.
Omar Ali, UK Financial Services Leader at EY, stated that in anticipation of the Parliamentary vote in January, the City will be watching closely to see if the proposed Brexit deal will be accepted or whether it’s back to the drawing board for the Government.
“As things stand, and per regulatory expectations, financial services firms have no choice but to continue preparing on the basis of a “no deal” scenario.”
Furthermore, over half of the 48 universal banks, investment banks and brokerages monitored by EY have said they are considering moving or have confirmed that they are moving some of their operations and/or staff.
This compares to 25 out of 57 of wealth and asset managers and 16 out of 38 of insurers and insurance brokers.
The number of jobs that could relocate from London to Europe in the near future stands at just over 7,000, according to EY.
This is a fall from previous public pronouncements due to some companies “fine tuning” their projections and revising down their estimates, as well as deciding to hire certain roles locally on the continent.
Since the Referendum, EY estimates around 2,000 new European roles have been or will be hired locally by financial services companies in response to Brexit.
“The closer we get to 29 March without a deal, the more assets will be transferred and headcount hired locally or relocated,” Ali added.
“Inevitably, the contingency plans are for Day 1 only, and in the event of “no deal” will represent the tip of the iceberg as longer-term plans will be more strategic and extensive than those publicly announced to date.”
