Financial services firms move £1.3tn out of UK since Brexit vote

Financial services firms have said they have moved £1.3tn from the UK to the EU since the 2016 Brexit referendum.

Data from accountancy firm EY’s latest Brexit tracker also shows 7,600 financial services jobs have moved to the EU from the UK because of Brexit since the referendum.

At the date of EY’s previous survey in October 2020, an estimated £1.2tn of assets had moved to the EU from the UK alongside 7,500 jobs.

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EY said the data showed that the mass movement of jobs and assets to the EU because of Brexit had ended, but an incremental flow of assets and people from the UK to the EU was still expected.

Omar Ali, EY’s EMEIA financial services managing partner for client services, said: “After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed and will likely be replaced by the slower yet ongoing movement of people and assets to Europe for compliance purposes.”

The negative impact of leaving the EU is still being felt by some in the UK financial services sector, with over a quarter (57 out of 222) of firms publicly stating that Brexit is impacting or will negatively impact their business, up from 49 firms in January 2020, the survey said.

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The UK and EU are in talks over a memorandum of understanding on a post-Brexit framework for financial services, which are expected to conclude later this month.

The two sides are expected to agree to terms for future financial services interactions between the European Union and UK based on an existing framework between the EU and the US, Financial News reported on 26 February.

“Specific policy work to align the UK and its closest trading partner remains crucial and will be mutually beneficial — uncertainty has been a thorn in the sector’s side for nearly five years,” Ali said. “Firms in both the UK and the EU continue to deal with the challenges well, and the fact that no major service disruption occurred on 1 January 2021 demonstrated just how well prepared the financial services sector was.”

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