Britain’s financial and professional services industry may be worrying about a mass jobs exodus after the UK voted for a Brexit but, actually, there will not be a massive shift in jobs from London to other European cities for quite some time, according to the global chairman of Deloitte.
“I think companies are looking at potentially looking at moving roles from London but they have been fairly thoughtful about that. No one is going to be jumping quickly,” David Cruickshank told Business Insider.
“Companies have been contingency planning, for what they would do in the event of a Brexit — including passporting financial services — for a long time before the referendum result. I think right now, when there is no certainty of outcome and what a Brexit looks like, everyone is being careful to wait and see.”
On June 23, 51.9% of Brits voted for a Brexit in the referendum on European Union membership versus 48.1% who voted for Britain to stay within the EU. The turnout was 72.2% of the 46,499,537 people who were entitled to take part in the vote. This is a record for a UK poll.
Since then, the markets have been extremely volatile, with the pound hitting a 31-year low at one point and with European stocks see-sawing. On top of that, banks like Morgan Stanley are predicting that a Brexit could knock 1.5 percentage points off UK GDP over the next 18 months.
Meanwhile, people are starting to worry that this may see the end of the City of London as a financial hub and that financial services will be uprooting staff and moving operations across to the EU.
Richard Gnodde, co-head of the Investment Banking Division of Goldman Sachs, wouldn’t rule out moving some or all of the bank’s 6,500 UK staff members to Europe when asked about Goldman’s post-Brexit plans at the Times’ CEO Summit on Tuesday. JPMorgan has also said it may need to move a quarter of its 16,000-member UK staff to the EU. Both HSBC and Morgan Stanley are believed to be planning to move 1,000 staff each to the EU, though Morgan Stanley denied recent reports. Other banks have announced possible moves too.
However, Cruickshank told us that it is way too early to tell what the industry is going to do and says “considerations” for moving staff overseas would naturally have been debated when putting together contingency plans.
“I don’t think anyone will be jumping quickly as there is so much uncertainty. I think at the beginning of week, there was a lot of shock, but now companies are just focusing on getting down to business and carrying on. There is not much we can do right now,” said Cruickshank.