With just three months to go until the end of the Brexit transition period, financial services firms have moved over £1 trillion of assets and continue to switch jobs out of the UK, despite the pandemic restrictions, research from EY shows
According to the firm’s financial services Brexit tracker, at the end of the last quarter, over 400 UK financial services role relocations to Europe were announced, taking the total number of jobs leaving London to over 7,500.
Dublin remains the relocation destination of choice, with 34 financial services firms saying they are considering or have confirmed relocating operations and/or staff to the city, along with Luxembourg (26), Frankfurt (23), and Paris (20).
Since the 2016 referendum, 40% of the 222 of the firms monitored by EY have confirmed at least one location in Europe where they are moving or considering moving or adding staff and/or operations to. Of those, 26 firms have confirmed multiple locations for relocating staff and operations.
Omar Ali, UK financial services managing partner at EY, said: ‘Many financial services firms had implemented the bulk of their relocation plans before the start of the year, and we saw very little movement in the first half of 2020.
‘But as we fast approach the end of the transition period, we are seeing some firms act on the final phases of their Brexit planning, including relocations.
‘This is despite the pandemic and consequent restrictions to the movement of people, which is clearly making it harder to relocate people and adds complexity for those who were looking to commute to EU locations.
‘With the prospect of a deal between the UK and EU still hanging in the balance, many firms still remain in a “wait and see” mode. The pre-trade agreement, set to be finalised at the end of October, means we could yet see a flurry of further staff and operational announcements in the weeks that follow.’
Separately, BDO says its third monthly poll of 500 mid-sized businesses leaders suggests concern about a possible second wave of Covid infections is overshadowing their Brexit preparation plans.
Its research among businesses with revenue between £50m-£350m shows that only one third have ‘adapting my business for Brexit’ in their top immediate concerns, and instead are focused on making loan payments (37%) and managing redundancies (36%).
Just over a third (36%) did cite managing supply chains as an immediate top priority, an issue likely to be made more complex by the imminent prospect of a no-deal Brexit.
The research also shows that the majority of medium-sized business see a domestic second wave of Covid-19 as a greater risk than a no-deal Brexit for both their businesses (66.5%) and the wider UK economy (61%).
Paul Eagland, BDO’s managing partner, said: ‘“Businesses are facing two major challenges and remain in survival mode.
‘Covid-19 has pushed many of these businesses to rethink their operations, with almost a third still making changes to their businesses as a result of the pandemic.
‘The uncertainty around the virus, coupled with the complexities a no-deal Brexit could bring before the end of the year, leaves business leaders spinning a number of plates.’
Looking ahead, sentiment around recovery is slightly more positive. Over the next six months, 41% of medium-sized businesses plan to make investments particularly in technology, and 40% plan to hire graduates or apprentices.
Eagland said: ‘Despite Covid-19 derailing some plans and sparking debate around the government’s regional “levelling up agenda”, the majority of mid-sized businesses (86%) are still hopeful that progress will be made over the next three years.’