PwC confident of EU financial services deal

The European Union will eventually agree a post-Brexit deal with the UK over financial services because the bloc "needs London", according to one of the 'Big Four' multinational professional services firms.

David Sapsted

26 April 2021

John Garvey, global head of financial services at PwC, told the Sunday Telegraph that he was confident Brussels would grant the City of London access to its capital markets, although he said he did not expect an agreement to be reached imminently.His remarks came on the heels of comments from the financial services at boss at KPMG - another of the 'Big Four' - who predicted that the City would continue to flourish even if no equivalence deal was reached.Financial services were omitted from the post-Brexit trade deal reached just before the end of the transition period at the end of last year, and talks over a possible agreement have been going on since then, with a Memorandum of Understanding being signed last month.Last week, Mairead McGuinness, the European Commissioner for financial services, said, “I know there probably is an appetite on the UK side for us to sit down and get going. We are certainly very keen to do that, but we’re not under pressure to do it.”

PwC: Europe will need access to the London financial market

But Mr Garvey told the Telegraph, “There’s going to be a strange relationship developing over time where the Europeans realise they need London. So, I think there will be some kind of deal because the continent will need access to the London market.”

KPMG: the City could thrive without an equivalence deal with the EU

Meanwhile, Karim Haji, KPMG's head of financial services, has said that while an equivalence deal with the EU would "make life easier", the City could continue to thrive without one.“It’s not that if we don’t have one, things will suddenly stop working or become very difficult,” he said. “I don’t believe that at all, and actually most of the clients I talk to definitely recognise that.“If you take a step back, the UK has been one of the leaders in financial services regulation and infrastructure, it’s one of the key innovators in the space as well, and one of the leaders in the world, and that’s why the UK has been successful in exporting financial services – that isn’t changing as a result of Brexit.“The regulatory regime that we had before Brexit and today is by and large the same, and many of the regulations that we talk about in terms of EU regulations, the UK was not only an active participant, but quite a leading thinker, and the relationship between the UK regulators and the European regulators is still strong, so I think that there are lots of positives.”

UK financial sector: hiring growth

Latest figures show that the UK's financial services sector has returned to hiring growth this year with a 50%, year-on-year increase in jobs available in March, according to the Morgan McKinley's spring 'London Employment Monitor'.Quarter-on-quarter figures also showed 70% growth in Q1 with the number of job-seekers also rising by 4.8%.Hakan Enver, managing director of Morgan McKinley UK, said, “Financial services has had a strong start to 2021. As the vaccine rollout continues apace and the road out of lockdown clears, we are seeing the sector recover at a faster rate than anticipated. We expect this recovery and confidence to continue as the country unlocks and normal working life resumes.“The 70% increase in job creation this quarter is encouraging and suggests that the crisis has turned a corner, with confidence growing, which in turn is fuelling hiring activity and momentum.“Banks are back in expansion mode with a strong uplift in appetite for hiring experienced professionals.”