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Up to 80,000 jobs could move from London to centres across Europe, report warns

Published 06/07/2016

The hit would be the biggest blow to the Square Mile since the banking crisis
The hit would be the biggest blow to the Square Mile since the banking crisis

Up to 80,000 jobs could be shifted out of London and into rival financial centres across Europe in the wake of the Brexit vote, a report has warned.

Around 20% of the capital's banks and financial services jobs look set to be transferred overseas, with Frankfurt trumpeted as the "most attractive location" among bankers, according to The Boston Consulting Group (BCG).

The hit would be the biggest blow to the Square Mile since the banking crisis, when London's financial sector lost more than 55,000 jobs between 2007 and 2010.

The BCG survey was compiled of responses from 360 leading bankers in the UK, France, the United States and Germany in the run up to Britain's vote on the European Union.

Dr Wolfgang Dorner, banking expert and head of Frankfurt's BCG office said: "The economic and political stability in Germany, combined with the availability of qualified workers, make the financial centre on the river Main the top location base on this pre-Brexit survey."

The research said the Brexit vote would have a far-reaching impact on the Square Mile, with jobs being transferred from all banking business units, including international payment transactions, investment banking and trading businesses.

It added that Britain's exit from the EU could also spark an exodus of jobs in sectors outside of financial services, including insurance, pharmaceuticals and biotechnology.

Dr Dorner added: "Not just Frankfurt, but other economic centres in Germany, too, should prepare for job relocations in various industries and actively seize the opportunities offered by this influx of qualified workers."

Industry concerns following the Brexit vote have centred around the UK's membership of the single market and whether it will continue to have access to the bank passporting system.

Banks and financial firms wanting to trade with a country in the European Economic Area must apply for a passport, which allows them to sell their products to any country within the EEA.

However, the European Central Bank (ECB) has warned that Britain would not be able to access the passporting system without remaining a member of the single market and abiding by its rules, which includes the free movement of people.

Rajesh Agrawal, London's deputy mayor for business, said finance firms in the capital have reassured him that they are taking decisions following the referendum result in "a clear and calm manner".

He added: " As the driving force of the UK's economy, London must have a seat at the decision-making table for the process of negotiation with the EU.

"Within that discussion, first and foremost, we will seek to protect our access to the single market and passporting, which have long been central to London's appeal as a base for financial and professional services."

JP Morgan, HSBC and Goldman Sachs all said prior to the vote that thousands of jobs in the City of London could be moved to the continent in the event of Brexit.

The UK's financial and professional services contribute to 1.8% of UK GDP and employ nearly 2.2 million, according to lobbying group TheCityUK.

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