The UK’s exit from the European Union has smashed almost 40,000 jobs in London’s financial hub, the Lord Mayor of the City of London has said.
Michael Mainelli claims that Londoners have moved to European cities such as Milan, Paris, and Amsterdam to work due to Brexit, with Dublin alone benefiting from 10,000 skilled employees.
Mainelli said, “We had 525,000 workers in 2016. My estimate is that we lost just short of 40,000”. He added, “The City voted 70-30 to remain. We did not want [Brexit].”
Job losses
The economist’s estimate, drawn from years of tracking the city’s financial trends and talking to financial firms, significantly exceeds the previously predicted loss of 7,000 jobs.
City of London bosses initially welcomed Brexit hoping it would mean less immigration, reduced EU regulation, and a stronger economy. In reality, those aims have been labelled as “far from accurate” with immigration rising, and deregulation becoming more difficult to achieve. As a result, business leaders now want to strengthen their relationship with the EU to review these problems.
Britain’s financial services output has contracted by 1 per cent since the end of 2019, according to national data, while France and Germany recorded 8 per cent growth and Ireland’s financial sector is up 18 per cent.
Trade volumes
In March, Britain’s official budget forecaster confirmed its earlier projection that Brexit would cut trade volumes by 15 per cent was “broadly on track.”
Despite opinion polls showing most Britons think Brexit has failed, prime minister Keir Starmer has emphasised that a Labour government would not take the country back into the single market, going as far as to say that it would not happen in his lifetime.
That is despite warnings that a shift in chunks of euro derivatives clearing from London to European Union countries is now inevitable.
The EU approved a new law in February that will require banks and asset managers in the bloc to have an “active account” with a clearing house in the 27-member grouping for key contracts being cleared in London by ICE Clear and London Stock Exchange Group.
“The direction of travel is very clear… everyone needs to be prepared, set up, be capable of doing business in the EU,” Matthias Graulich, an executive board member at Eurex Clearing, the Deutsche Boerse unit in Frankfurt that will benefit from the new law.
“I think effectively we are starting with this requirement in the second quarter of next year probably, so it gives us a good year to prepare,” Graulich told the annual IDX derivatives conference, adding that “huge numbers” of customers have hooked up to Eurex Clearing.
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