Almost six years on from its decision to leave the EU, the UK remains Europe’s main financial services hub as Brexit-related job relocations continue to be revised down.
The total number of planned job relocations from UK financial services firms to the EU stood at just over 7000 at the end of March, down from 7400 in December 2021 and from 12,500 at the peak in 2016, according to the latest figures from EY’s Financial Services Brexit Tracker.
“If you look at the number of jobs publicly declared to move from the UK to Europe, it’s just over 7000 from the total UK financial services segment of over one million,” says Andrew Pilgrim, UK financial services associate partner at EY. “So, it’s a very small percentage, albeit these are significant roles that are moving. But London is still the major global financial services hub in Europe. It’s got many natural advantages in terms of law, the technology sector that sits here and regulatory capabilities.”
UK financial services firms, particularly investment banks, had initially planned high numbers of job moves to the EU in anticipation of a ‘hard Brexit’ and losing access to the single market.
“The moves are certainly lower than a lot of the initial expectations in the market,” says Mr Pilgrim. “There was an enormous amount of uncertainty back in 2016 when the referendum took place, in terms of what sort of Brexit we would have and whether there would be a trade deal.”
The moves are certainly lower than a lot of the initial expectations in the market
However, Mr Pilgrim notes that while the UK has secured a trade deal with the EU, there is no significant financial services component to it.
“For example, the EU has only granted temporary access for the UK on clearing in the EU until the end of June 2025, so we don’t know what's going to happen after that,” he says. “Clearing is an important part of cross-border market access.”
Since the UK voted to leave the EU, 44% (97) of the 222 largest UK financial services firms monitored by EY have announced plans to move some of its operations and/or staff to the EU. Meanwhile, 24 UK financial services firms have announced that they will transfer just over £1.3tn of UK assets to the EU.
Dublin has proven to be the most popular destination for Brexit-related job relocations to the EU, with 36 financial services firms having announced plans to move to the city, according to EY’s research. This is followed by Luxembourg, which has attracted 29 firms; Frankfurt has gained 23 and Paris 21.
But in terms of the number of relocations to one single destination, Paris is the most popular choice, attracting around 2800 employees, followed by Frankfurt (1800) and Dublin (1200).
For the UK banking sector, Frankfurt and Paris are the most popular relocation destinations, having attracted 19 and 15 UK investment banks, respectively.
