Brexit job moves from London 'far below predictions'

Why haven't more financial services jobs left London in the run-up to Brexit? Also, which are the most popular EU destination for firms that do leave London? David Sapsted reports.

The river Liffey in Dublin at night
Only 1,000 jobs in the UK's financial services sector have been relocated to EU27 nations in the three years since the Brexit referendum, according to a report published on Thursday.EY’s latest Financial Services Brexit Tracker showed that Dublin remained the most popular location for firms creating new EU hubs, followed by Luxembourg and Frankfurt.

EY: about 7,000 London-based staff are ultimately expected to move to the EU

The tracker, which monitors the activities of 222 large finance firms in the UK, found that the number of job relocations was far below earlier estimates of the total likely to be lost or moved.However, EY said that while only a thousand roles have so far been relocated, about 7,000 London-based staff are ultimately expected to be moved to remaining EU nations.Omar Ali, UK financial services leader at EY, said: “Given that many companies had pulled out all the stops to be ready ahead of the March deadline, much of the planning of temporary solutions for staff and operational moves has already been completed.“Financial services firms have the building blocks in place, but have so far transferred fewer staff and assets to the continent than expected.”

London: still the world's 2nd largest global hub yet danger remains

Coinciding with publication of the tracker was an annual ranking of global financial centres produced by consultancy Z/Yen partners, which reaffirmed London’s status as the second biggest global hub behind New York.

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“We cannot afford to be complacent,” commented Catherine McGuinness, policy chair at the City of London Corporation. “Day by day, as uncertainty persists, so does the threat of more businesses moving jobs and operations away from the UK.”EY found that 29 financial firms had committed to relocating staff or operations to Dublin since the 2016 referendum, while Luxembourg had attracted 25 so far, just ahead of Frankfurt with 24.The tracker showed that Dublin had mainly attracted insurance, banking and asset management firms, while Luxembourg's appeal was mainly among asset managers and insurers. Frankfurt had mainly been selected by large investment banks.

Why have financial firms not left London before Brexit?

Noting that the number of relocation announcements had fallen significantly in the past three months, EY said this suggested that firms had paused decisions since the October extension date for Brexit was announced earlier this year.Cormac Kelly, financial services Brexit lead for EY Ireland, told RTE that the firms that had relocated and were operationally viable were now concentrating on embarking on "business as usual".He added, "The challenge for them now is running their newly regulated entities across the European jurisdiction where market conditions are tough, regulators are demanding, and the need to deliver cost reduction and productivity increases are relentless."Given the continued confusion around the UK political landscape and uncertainty on the timeline for a Brexit outcome, firms continue to spend time and effort planning for a no-deal, but most are seriously hoping for a clear resolution soon so that they can have confidence in a more certain 2020."

Brexit relocations will boost the Irish economy

Neil Gibson, chief economist at EY Ireland, added that Dublin's top position on the relocation league table was particularly encouraging given the increasing focus within the sector on cost reduction.He said that the moderation of house price growth in the city and very benign inflation conditions had been extremely helpful and somewhat unexpected given the pace of Irish growth."In the event of a no-deal Brexit, the relocations will be very helpful in generating income that government can invest to offset losses elsewhere in the economy," he added.

For more news and views, visit our dedicated Brexit section.

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