City firms plan to move 10,500 jobs out of the UK on “day one” of Brexit, with Dublin and Frankfurt the financial centres most likely to benefit from the UK’s departure from the EU.
The job tracker compiled by the accountants EY, which counts job announcements to the end of November, found that the number of roles likely to be affected had fallen from estimates of 12,500 a year ago. But it also concluded that the jobs being affected by Brexit were not just the “back office” ones initially forecast, but “front office” staff who deal directly with clients.
Omar Ali, EY’s UK financial services leader, said Friday’s announcement of a first-stage deal, allowing talks to move on to trade, had sent “a wave of relief across the City”.
“It signalled an intention to agree a transitional period as early as possible next year and the starting point for negotiations on future trade deals, both of which are fundamental to avoid adding any additional risks to the system and for the future strength of the UK financial services industry,” said Ali.
Major City firms have started to announce how they will respond to the UK’s exit from the EU after being told by the Bank of England to present contingency plans for all eventualities, including a “hard” Brexit. Last month Sam Woods, a deputy governor of the Bank, warned that 10,000 jobs could leave the City on “day one” after reviewing these plans.
Ali said firms’ contingency plans had become more detailed over the past year. “The extent of broader strategic restructurings and relocation plans will of course ultimately depend on the specifics of any long-term UK deal with the EU, but a drop in the volume of jobs moving will be welcome news for the City.”
EY said that since the July 2016 referendum 31% of the 222 companies it was tracking have said they are considering or have confirmed the movement of some of their operations and/or staff out of the UK.
Goldman Sachs, for instance, has begun to implement contingency plans by taking the top eight floors of a 37-storey block under construction in Frankfurt, even though it is building a new European headquarters in London. It has not said how many of its 6,000 roles in London will be impacted.
EY’s tracker puts Dublin and Frankfurt ahead of other alternative centres in the EU, attracting 14 and 12 companies, respectively.
Analysts at the Japanese bank Nomura are also tracking the potential for job moves and said: “Depending on whether we get a transitional deal, 10,000 jobs spread over a one- to three-year period is a relatively small number, but for markets it’s the long- term impact of Brexit that we find adds up to 35-40,000 that will matter more.”