The European Union has admitted that a doom-laden forecast of huge “City” job losses in London resulting from financial institutions moving their operations to Frankfurt, Paris and Amsterdam after Brexit was wildly over-stated, a European Parliament report says.
It had been predicted that 44 per cent of highly-paid jobs in the UK capital, around 75,000 in total, would leave Britain following its withdrawal from the EU, signalling a dimming of its role in financial services.
The European Parliament’s Committee on Economic and Monetary Affairs’ report into the EU/UK Trade and Co-operation Agreement, released earlier in November, told a different tale.
In addressing “estimates suggesting 44 per cent of the UK’s largest financial services firms announcing plans to move some staff or operations”, the report said, “the number of jobs that have relocated out of London thus far is only 7,000 and far below the initial estimates of 75,000”.
The admission comes after the City of London Corporation policy chairman Chris Hayward told the BBC’s Brexit: A Guide for the Perplexed TV series that, while 7,000 jobs had moved away “many more thousands” had been created.
That was because EU banks had relocated some of their operations to London to remain active in the UK market.
Hayward said the figure had surged, with Britain “fast becoming a world leader in fintech and green finance”.
The City currently accounts for one in every five financial services jobs in the UK. The number of jobs has grown by more than 13 per cent since the pre-COVID pandemic period of 2019 to 2022, with almost 73,000 more jobs than in 2019.
The EU report continued that it “acknowledges that the City of London remains a global centre for financial services with a global reach that EU business could benefit from accessing”, and “strongly supports continued cooperation between the EU and the UK in areas related to financial, economic and monetary affairs that are of mutual interest”.
The City remains key to the UK economy. The most recent figures available show the financial and professional services sector produced £278 billion in economic output, contributed nearly £100 billion in taxes in 2020, exported more than £128 billion worth of goods and generated almost £2 billion in foreign direct investment for the British economy.