London – Some 10,000 UK financial services jobs could move abroad on the first day of Brexit, the Bank of England has predicted after warnings of up to 75,000 relocations in total.
Back in April, the central bank asked British financial companies to draw up contingency plans based on the assumption that Britain would leave the EU with no trade deal, and that they would lose the passporting rights allowing banks to be based in Britain while trading freely with other EU countries.
Reporting back on the findings of that survey to the House of Lords, or upper house of parliament, on Wednesday, the head of the BoE’s regulatory arm, Sam Woods, said that around 10,000 jobs could go on the first day in the case of a pessimistic Brexit scenario.
Britain is set to leave the bloc in March 2019, but is still in the midst of tough exit negotiations with the EU.
Woods, head of the BoE’s Prudential Regulation Authority (PRA), meanwhile pointed out that the 10,000 number was comparatively small when looking at the sector as a whole.
They represented “less than one percent of financial services jobs” in the UK, around two percent of UK bank and insurance jobs, and two to three percent of positions in the City, or London’s financial district, Woods told the House of Lords’ EU financial affairs sub-committee.
But Woods also confirmed that the Bank of England considered it to be “within the plausible range of scenarios” that around 75,000 financial services jobs could be lost after Brexit, as suggested by an independent report by consultants Oliver Wyman in 2016.
Large financial institutions have already announced plans to move some activities to Frankfurt, Amsterdam, Paris and Dublin, including British HSBC, Swiss UBS and American banks, JPMorgan and Morgan Stanley.
Elsewhere on Wednesday, the independent National Institute of Economic and Social Research (NIESR) said the average household had lost an average £600 ($798, 680 euros) per year since the UK voted for Brexit in June 2016.
“Had sterling not depreciated and the economy continued to grow at its previous rate… real household disposable income per head might have been more than two percent higher than now,” said Garry Young, NIESR’s director of macroeconomic modelling and forecasting.
Negotiators from both Britain and the EU are scheduled to resume Brexit talks in Brussels on November 9.
EU leaders are scheduled to hold a summit next month to decide whether or not to begin negotiations on a transition period and future partnership agreement once Britain has left the European Union.
By Kenza Bryan