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Brexit’s Effect On London, Europe’s Dominant Financial Services and Technology Centre

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Nick Cudbill Financial Services, Fintech

Over the last couple of years the media have been all too keen to highlight any move by major financial services organisations to transfer business or staff from London to Europe, and the overall effect has thus far been deeply misleading.

Of course it doesn’t help when the BoE Governor, Mark Carney, seems completely unable to offer a balanced view. One recalls the then CEO of the London Stock Exchange, Xavier Rolet, commenting that London would lose 230k jobs if a deal wasn’t agreed between the UK and the EU. Many have pointed out as a Belgian national he might not have been completely neutral. Even Carney suggested “only” 75k jobs could go…

The reality is much different and worth highlighting. With the Lord Mayor of the City of London pointing out last summer that the real number is likely to be between 5-13k. To corroborate this, over the last year or so, tier one banks guesstimate of the number of jobs that have moved, or might, has been pretty minimal. 

(HSBC 1k possibly, JP Morgan 4k out of a total of 16k and only in the event of a no deal, Morgan Stanley maybe 500, Goldman possibly 400 and Barclays just 50!)

In conversations with my contacts across the industry, the feeling is that somewhere between 5-10% of roles may move to Europe, at most. A significant number of those will be duplications of existing London-based functions, rather than direct transfers. 

I suspect, London has lost more jobs to off-shoring in tech and support functions since the crash than it will lose due to Brexit. 

On an ancillary note, City AM highlighted last week that London has been voted Europe’s Top Fintech Hub for the 2nd year running (my only thought is which city could possibly have won it before that!?) with 360k staff, a third more than Paris, and startup funding running at twice the level of Paris and Berlin.

As someone who has worked in the city for over 30 years and seen enormous changes during that time, in conclusion I am confident that London’s resilience, inventiveness and competitiveness will continue to ensure that no matter what economic or industry-related events arise, it will remain Europe’s financial services and fintech powerhouse.

 

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