Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

City of London Brexit hit worse than expected, says study

Stock Markets Apr 15, 2021 07:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The City of London financial district is seen with office skyscrapers commonly known as 'Cheesegrater', 'Gherkin' and 'Walkie Talkie' seen in London, Britain

By Huw Jones

LONDON (Reuters) - Over 400 financial firms in Britain have shifted activities, staff and a combined trillion pounds ($1.4 trillion) in assets to hubs in the European Union due to Brexit, with more pain to come, a study from New Financial think tank said on Friday.

"We think it is an underestimate and we expect the numbers to increase over time: we are only at the end of the beginning of Brexit," the study said.

The EU has offered Britain little in the way of direct market access for financial services, which were not included in the bloc's trade deal with the United Kingdom from January.

"That access is unlikely to be forthcoming, so it is perhaps better for the industry to take the damage from Brexit on the chin and focus instead on recalibrating the framework in the UK so that it is more tailored to the unique nature of the UK financial services industry," the study said.

Some 7,400 jobs have moved from Britain or been created at new hubs in the EU, the study said. Bankers have told Reuters that some staff moves have been delayed due to COVID-19 travel restrictions.

The total of 440 relocations is higher than anticipated and well above the 269 in New Financial's 2019 survey. New Financial believes the real number is well over 500.

New Financial Graphic 1: https://fingfx.thomsonreuters.com/gfx/mkt/bdwvkbzdopm/New%20Financial%20Graphic%201.PNG

DUBLIN WINNER

Dublin has emerged as the biggest beneficiary with 135 relocations, followed by Paris with 102, Luxembourg 95, Frankfurt 63, and Amsterdam 48.

"This redistribution of activity across the EU has wound the clock back by about 20 years," the study said.

Banks have moved or are moving over 900 billion pounds in assets from Britain to the EU, while insurers and asset managers have transferred over 100 billion pounds in assets and funds, reducing the UK tax base.

"We expect Frankfurt will be the 'winner' in terms of assets in the longer-term, and that Paris will ultimately be the biggest beneficiary in terms of jobs," the study said.

Amsterdam toppling London as Europe's biggest share trading centre since January has been the most visible sign of Brexit in finance.

The study expects that 300 to 500 smaller EU financial firms may open a permanent office in Britain, far fewer than the prevailing forecasts of around 1,000.

The City of London will remain the dominant financial centre in Europe for the foreseeable future, but its influence will be chipped away, risking a reduction in Britain's 26 billion pounds annual trade surplus in financial services with the EU, the study added.

New Financial Graphic 2 https://fingfx.thomsonreuters.com/gfx/mkt/yxmpjdnlopr/New%20Financial%20Graphic%202.PNG

($1 = 0.7262 pounds)

City of London Brexit hit worse than expected, says study
 

Related Articles

Goldman Sachs Becomes More Defensive, Upgrades Autozone
Goldman Sachs Becomes More Defensive, Upgrades Autozone By Investing.com - Jun 27, 2022

By Sam Boughedda AutoZone Inc (NYSE:AZO) was upgraded to Buy from Neutral by Goldman Sachs analyst Kate McShane on Monday, with the firm "getting even more defensive." McShane said...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
rusty largo
rusty largo Apr 16, 2021 5:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brexit dividend, payouts . One does wonder exactly what London's residential property values will look like a year from now
Andrew Harman
Andrew Harman Apr 16, 2021 5:22AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
1500 companies are moving from the EU to the UK.We keep hearing these remain stories- that in the long run, have no material or noticeable impact. Yes companies will leave the UK, but EU companies will come here too. The status quo remains
Irvin Mermelstein
Irvin Mermelstein Apr 15, 2021 8:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Suicidal Brits. This is exactly what was predicted.
Roger Miller
Roger Miller Apr 15, 2021 8:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The EU has been looking pretty dysfunctional this past year, no doubt the UK made the right choice. Loosing one of it’s largest economies can’t be helping the EU. Next question is how long before the German people make the same choice?
Gamer Turtle
GamerTurtle Apr 15, 2021 8:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lmao. UK is known for its financial services but it can't service anyone in eu with the brexit. plenty of business up for grab, all thanks to uk.
danny Levine
danny Levine Apr 15, 2021 7:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
another propaganda piece
German Villanueva
German Villanueva Apr 15, 2021 7:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bad decisions taken by U.K. but still in the long run might deliver much freedom to British people take the pain now and enjoy later at large
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email