The City of London fears losing up to 100,000 Jobs
- Morgan Stanley denied a report that it was already moving 2,000 staff
- But sources say there is a plan to move up to 1,000 jobs out of Britain
- JP Morgan has said Brexit could see it move up to 4,000 roles
- HSBC and Goldman Sachs have also indicated plans to move people
The City of London is facing as many as 100,000 job losses amid fears the UK’s dramatic vote to quit the EU will force banks to shift business out of London to other European financial centres. The threat to UK operations would be a major blow to the City – dubbed by some the ‘golden goose’ of the UK economy because of the taxes raised from highly paid bankers and the trade it attracts from other European countries. But leading bankers now fear that London’s glory days are behind it.
One top investment banker, who preferred not to be named, told The Mail on Sunday that ‘we have seen the high watermark of London as a financial centre’ because major banks are considering plans to move thousands of jobs to Frankfurt and Dublin.
People in the City were ‘monster shocked’, he added.
Morgan Stanley denied a report on Friday that it was already moving 2,000 staff but sources close to the bank said there is a plan to move up to 1,000 jobs out of Britain.
JP Morgan has said Brexit could see it move up to 4,000 roles but will not quit London, while HSBC has said it could move another 1,000 and Goldman Sachs has said it will shift jobs to Frankfurt.
And in a symbolic blow to London’s status as Europe’s financial capital, the continent-wide financial regulator, the European Banking Authority, which employs 160 people at Canary Wharf, has said it will have to move.
One senior trader, who said he works at one of the big banks at Canary Wharf, said: ‘An all-staff email was sent out this morning telling us that since the Brexit result the company may face some big decisions ahead but for now it would be business as usual.
We are trying to be optimistic but I think some people are worried we’ll be getting a call to HR on Monday morning.’
And one trader at Citibank, who also did not wish to be named, said: ‘We are still trying to understand what will happen next.
‘This is totally uncharted territory so we all have to wait and see.
‘There have been rumours of job losses but nothing official has been said. I guess we’ll find out in the next few weeks.’
He added: ‘I can’t speak for my organisation but this is terrible for the City.’
Xavier Rolet, Chief Executive of the London Stock Exchange, had warned in the lead-up to the referendum that 100,000 jobs could go.
Banks would like to stay put but experts believe the EU will force them to shift key roles trading certain products priced in euros to an EU country.
Sharon Bowles, a former Liberal Democrat MEP who chaired the European Parliament’s Economic and Monetary Affairs Committee, said: ‘That will inevitably happen. I don’t see any way out of that one. France has always wanted to get this business.’
Financial services firms in London ‘will start to plan, I am not sure they will wait,’ said Mike Rake, former Deputy Chairman of Barclays and a long-term pro-European.
Alan Greenspan, former Chairman of the US Federal Reserve, told the BBC: ‘The focus is going to shift to other areas of economic union: Frankfurt, Paris, or what have you.’
Meanwhile, thousands of jobs in Britain’s £6.4 billion pharmaceutical industry could also be wiped out because of the vote to leave the EU, fear industry sources.
Six hundred office jobs will be the first to go as the European Medicines Agency (EMA) will have to relocate its London headquarters to the continent, they say.
But manufacturing jobs will also be at risk.
Pharmaceutical firms currently employ around 70,000 people in the UK, contributing £6.4 billion a year to the economy.
Mike Thompson, Chief Executive of the Association of British Pharmaceutical Industry (ABPI), said Brexit has put that in jeopardy.
Economists took a red pen to Britain’s economic forecast this weekend as the shock Brexit vote prompted many to slash growth expectations and warn of a looming recession.
It came as credit ratings agency Moody’s cut its outlook on the UK from ‘stable’ to negative’ and Sir Michael Rake, chairman of BT, raised the spectre of cost-cutting across industry if the threat of a long period of uncertainty was not resolved quickly.
‘Businesses will hold back on investment in the short-term volatility,’ he said.
‘If this period of uncertainty goes on for longer and we don’t get some stabilisation then we will see people cut costs.’
Samuel Tombs, chief UK economist at Pantheon Economics, warned that a recession could be on the way, with the economy predicted to contract by 0.2 per cent in the third and fourth quarters of the year.
He said: ‘Surveys indicate that the mere threat of Brexit brought the recovery to its knees in the second quarter, so a recession seems likely.
‘Uncertainty will be so pervasive most firms will postpone capital expenditure, credit will become more expensive and harder to obtain, and consumer confidence will plunge.’
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