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Brexit Has Cost London Just 1,000 Investment Bank Jobs

Silla Brush

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With just over six weeks until the U.K. is due to quit the European Union with or without a deal, the much feared investment banker exodus out of London is still just a trickle.

Banks have moved 1,000 posts to rival hubs like Frankfurt and Paris since the referendum in June 2016, a report by EY said. That contrasts with some estimates of tens or even hundreds of thousands shifting to the EU as a result of Brexit.

Any evidence of a mass exit from The City of London so far has been conflicting in the lead up to the Oct. 31 Brexit deadline. The U.K. finance industry’s shift toward the EU has so far been piecemeal despite warnings from bankers that the slowing economy is going to cut into income in the coming years.

London has extended its lead in foreign exchange and interest rate derivatives trading since the referendum, according to the Bank for International Settlements. However, the city has lost some ground in the past year to New York as a financial center, due partly to the uncertainty swirling around Brexit, an index published Thursday by consultancy Z/Yen said.

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EY said the recent slowdown in Brexit moves followed the decision to delay departure at the end of March and reflected the industry’s confidence in its prior preparations for a messy divorce.

“Financial services firms have the building blocks in place, but have so far transferred fewer staff and assets to the continent than expected,” Omar Ali, U.K. financial services leader at EY, said in the report, which tracked 222 firms’ comments on Brexit.

Goldman Sachs Group Inc. has recently opened a new building in London, and JPMorgan Chase & Co. stalled large employee moves while warning that thousands of jobs could eventually leave the U.K.

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EY said firms could wind up relocating 7,000 jobs in the near-term. The industry could also move 1 trillion pounds ($1.25 trillion) of assets from London, an estimate that remained unchanged from the last survey published in June. EY didn’t report on the value of assets that had already moved.

The Investment Association, which represents fund managers, said earlier this month that savers jettisoned 1.2 billion pounds from U.K. equity funds in July, when Prime Minister Boris Johnson took power.

(Adds surveys in fourth paragraph and outflow from U.K. equities in eighth paragraph.)

To contact the reporter on this story: Silla Brush in London at sbrush@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers

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