Bank exodus from London to the EU is declining despite Brexit

City of London financial district seen in London, UK, October 22, 2021. REUTERS / Hannah McKay /

LONDON, December 20 (Reuters) – The number of financial jobs moving from the UK to the EU due to Brexit is smaller than first expected despite billions of euros in stock trading moving to the block and London losing most of access to EU capital markets, consultants said EY Monday.

After the UK voted to leave the EU in 2016, analysts such as Oliver Wyman estimated that up to 35,000 jobs in financial services or more would leave the UK.

The United Kingdom left the EU in December last year, ending the City of London’s unrestricted access to what had been its largest single export customer.

“Over the past year, however, a number of the largest investment banks in the UK have revised down the number of employees to be relocated to the EU, bringing the current number of Brexit-related job relocation announcements to just under 7,400, down from 7,600 in December 2020.” said EY in his latest Brexit tracker.

This is a fraction of the 1.1 million people who work in finance.

There have been around 2,800 new hires in the EU due to Brexit, which avoids the need to relocate some employees from London, with 2,200 finance jobs also created in the UK, EY said.

But EU regulators maintain pressure on financial firms to complete the number of employees and operational movements to the EU that have been delayed by the pandemic, EY added.

The European Central Bank wants to avoid ending up with hubs that run from London.

EY said that Dublin and Luxembourg are still the most popular after the Brexit destinations for new EU hubs, even though Paris has received the highest number of staff transfers.

Assets worth 1.3 trillion pounds have moved across the canal to the hubs.

“For many financial services companies, we are still far from being completely ‘post-Brexit’,” said Omar Ali, EMEIA’s head of financial services at EY.

Brussels has not yet signed up for a new discussion forum for financial regulators, which was agreed in principle in December last year, seen by the industry as the key to rebuilding trust across channels, although there has been some progress with euroclearing. read more

Miles Celic, CEO of TheCityUK, which promotes the UK’s financial center abroad, said it was time to focus on long-term competitive factors.

The UK has begun revising UK rules to make London more attractive to international investors and to compete better with EU centers such as Amsterdam, which passed the UK capital in January to become Europe’s largest stock trading center.

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Reporting by Huw Jones; editing by David Evans

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