Finserv Exodus Won’t Be As Bad As Initially Thought, Says Reuters

A new survey released by Reuters on Monday (Sept. 18) suggests the outflow of finance sector professionals from the U.K. economy as a direct result of Brexit is not likely to be as bad as previously thought.

Researchers estimate that 10,000 finance sector jobs will be shifted outside the U.K. if Britain cannot gain access to the European single market, with Frankfurt, Germany, the most popular destination for financial services companies that are planning to shift jobs outside the U.K. Paris, Reuters found, is a “distant second.”

While 10,000 jobs is nothing to scoff at, researchers noted that the figure is smaller than some analysts had previously estimated, and could mean London will retain its top position as the world’s leading financial hub.

“If it is going to happen, it won’t be in one big bank,” said one survey respondent, a senior executive at a top European bank. “There will be a slow drain of jobs from London over a number of years.”

Nearly half of survey respondents said they would be forced to move staff or restructure their investment banking operations because of Brexit. An additional third told Reuters that they are not expecting any impact from Brexit; the rest said they are still deciding.

Brexit will occur in March of next year, but Reuters found that some financial institutions are delaying their decisions as they await Brexit negotiations to wind down to a more definitive picture of what the process will look like.

“They would like to think there is going to be a mutually easy way of dealing with financial services across the EU-U.K. border,” said PwC Global Head of Brexit for Financial Services Andrew Gray, according to Business Insider. “So, firms are finding it hard to land on precise plans.”

Reuters surveyed financial companies across the U.K. and found that the investment banking industry in particular will be hardest hit by Brexit, with the survey suggesting 9,777 banking roles could be affected by the event. Some of those positions may be shifted out of the U.K. economy and into Europe, while others may lead to duplicate roles at EU banks, the report found.