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Hard Brexit 'could affect up to 75,000 financial services sector jobs'

Published 05/10/2016

Theresa May and key ministers have signalled the UK is on course for a hard Brexit
Theresa May and key ministers have signalled the UK is on course for a hard Brexit

The cost of a so-called "hard Brexit" to revenues in Britain's financial services sector could be as high as £38 billion, with up to 75,000 jobs in the firing line, a study shows.

The scenario in which British companies are unable to sell services across the European single market, outlined in a study commissioned by TheCityUK, would also see the Treasury lose up to £10 billion in tax revenue.

Sir Hector Sants, vice chairman at Oliver Wyman, which authored the report, said: "It is in everyone's best interests for there to be a positive outcome to the negotiations that is mutually beneficial to the UK and the EU, causes minimum disruption to the industry and benefits customers who have come to rely on the UK as a uniquely skilled and connected ecosystem for financial services."

His comments come as the pound continues its downward trajectory amid the Conservative Party conference, where Theresa May and key ministers have signalled the UK is on course for a hard Brexit.

In a "lowest access scenario", where the UK's relationship with the EU rests largely on World Trade Organisation regulations, the report estimates up to £20 billion in revenues and up to 35,000 jobs could be at risk, along with approximately £3 billion to £5 billion of tax revenues.

In a less drastic outcome where the Square Mile's financial institutions retain passporting rights, which allow them to do business in Europe, the report estimates 4,000 jobs would be at risk amid a £2 billion decline in revenues.

A Government spokesman said: "We want the best deal for Britain and that includes allowing UK companies to trade with the single market in goods and services.

"The Government has been speaking to the financial services industry to make sure that we understand fully the issues that matter to it as we prepare for negotiations to leave the EU.

"We want Britain to remain a great place for financial services and we stand ready to help the industry maximise the opportunities that leaving the EU presents."

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