According to lobby group The City UK, London’s financial firms are increasingly under pressure as Brexit negotiations are ongoing. Their chief executive, Miles Celic said “for our industry, this really is crunch time.”
The City UK said that Brexit has already pushed companies and jobs overseas. An estimated 10,000 finance jobs will be moved out of the UK over the next few years, though this is going to be largely based on whether the UK stays in the single market. This figure is according to a recent Reuters survey.
Mr Celic said: “Many firms are already moving parts of their operations out of the UK and Europe. When they’ve gone, it’s hard to see them coming back. Even if the UK and EU agree the best possible Brexit deal by 2019, without urgent clarity on transitional arrangements, business will assume the worst and act accordingly.”
A government spokesperson said that they are working with businesses to ensure “as much certainty as possible as we move through the exit process. We have been clear that we believe a time-limited, implementation period is in the interests of both the UK and the EU and that negotiations on the future partnership should begin as soon as possible.
“We have intensified our engagement with the business community to ensure their voice is heard and reflected throughout our negotiations giving them as much certainty as possible as we move through the exit process,” they said.
Catherine McGuinness, head of policy at the City of London said: “You can hammer out the best possible deal in the world, but it you take too long about it, you may lose some of the assets that you need to make the best future. We really would like to see some progress, putting pragmatism and jobs and the economy above politics and emotion.”
Mr Celic also said: “Post-Brexit, it will fragment the market, hinder the provision of essential financial services to EU and UK enterprises and governments and likely increase the cost of products and services for customers right across the continent.”
However, some people are more optimistic about the Brexit transitional period. Gerard Lyons, economist and writer and pro-Brexit campaigner said that this transitional period was actually a positive thing as it avoided the UK being thrown onto a “cliff edge” of sudden changes.
He went on to suggest that businesses’ fears were at times exaggerated. “Sometimes contingency planning is too extreme. Regulators can’t determine where the market goes to.” He said that a rush to dismantle London’s financial hub would see that other global centres such as New York or Singapore take London’s place in the world.
Are you worried about London’s financial sector or are you more optimistic? Please share your thoughts in the comments.