7,500 jobs and £1.2 trillion in assets leave UK for EU

7,500 jobs and £1.2 trillion in assets have left the UK since the 2016 Brexit referendum - Credit: Getty Images/iStockphoto

Financial service firms in the UK have moved 7,500 employees and more than £1.2 trillion pounds worth of assets to the EU ahead of Brexit, a report has claimed.

In a report tracking 222 of the largest financial firms in the UK, accounting firm EY said at least 400 relocations had occurred September alone and that many more were expected in the following weeks.

EU member states have experienced a jump of 2,850 financial sector positions since the 2016 Brexit referendum with Dublin, Luxembourg and Frankfurt seeing the biggest gains.

This comes as JP Morgan signalled it would shift €200bn in assets from UK to Germany as a result of Brexit.

US banking giant Goldman Sachs is also being reported to be planning the transfer of an additional 100 staff to Europe.

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From 2021, UK financial institutions and firms will have to rely on the EU granting them “equivalence” to continue operating in the bloc after the end of the transition period.

UK financial establishment have enjoyed decades of relatively hassle-free access to the EU’s financial centres thanks to being part of a “passport” system that will end once Britain leave the bloc on December 31.

Many are choosing to relocate staff and increase their presence in Europe to avoid some of the fall out from Brexit.

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“As we fast approach the end of the transition period, we are seeing some firms act on the final phases of their Brexit planning, including relocations,” said Omar Ali, U.K. financial services managing partner at EY.

“This is despite the pandemic and consequent restrictions to the movement of people.”

Many firms are still in a “wait and see” mode, and a flurry of further moves could follow soon, according to Ali.

The number of jobs leaving Britain still falls short of estimates. Think-tank Bruegel said in 2018 that London could ultimately lose 10,000 banking jobs and 20,000 roles in the financial services industry while former London Stock Exchange Group Plc chief Xavier Rolet said that the figure might reach 232,000 jobs.

The EY report also noted that as many as 24 financial services firms have said they will transfer assets out of the U.K. amid uncertainty about the nature of the City of London’s continued access to the bloc.