Sadiq Khan warns that city firms like Goldman Sachs are 'not bluffing' about Brexit exodus to Frankfurt

Sadiq KhanLeon Neal/Getty ImagesMayor of London Sadiq Khan speaks at Labour conference
  • Mayor of London Sadiq Khan has warned that city firms like Goldman Sachs are “not bluffing” about leaving the UK because of Brexit.
  • Khan said Goldman Sachs CEO Lloyd Blankfein was “just articulating publicly” what many have been saying in private, after Blankfein suggested the bank would be moving to Frankfurt.
  • The mayor said he fears that other businesses will leave London.

LONDON — Sadiq Khan has warned that city firms such as Goldman Sachs are “not bluffing” about leaving London if a favourable Brexit deal is not reached with the European Union.

Speaking on BBC Radio 4’s “Today” programme on Monday, the Mayor of London said that the “prime minister and our government need to announce plans for a transition period” or major banks will plan to leave the UK.

Referencing Goldman Sachs CEO Lloyd Blankfein’s tweet saying that he’ll be “spending a lot more time” in Frankfurt because of Brexit, Khan claimed he was not bluffing.

He said: “He is articulating publicly what many CEOs, investors and people who love working in London have been saying privately… they have to make a plan [for a no-deal scenario].”

The Mayor of London said: “My fear is that other business will be thinking about leaving London and will realise those plans,” adding that the government needs to “provide businesses with the certainty they need.”

Khan made it clear that he thought the transition period upon the UK’s withdrawal from the EU should be “a minimum of two years” and it should “be announced as soon as possible.”

Negotiations about a transition period and the future relationship between the UK and EU have been delayed at least until the end of December after the European Council voted to say “sufficient progress” had not been made for talks to advance.

This has raised fears that the UK and EU will fail to reach a Brexit deal during the two-year Article 50 period despite Theresa May announcing plans for a two-year transition period on current terms during her Florence speech.

Last week it was reported that Brexit Secretary David Davis would give a positive assessment of a no-deal scenario to the Cabinet and that he has told civil servants to step up preparations for such an eventuality.

It was reported on Monday by The Sun newspaper that the prime minister has delayed the Cabinet making a decision on the future relationship between the UK and EU until next year because of fears that it could cause further splits within the Conservatives.

The Mayor of London said: “It’s important they do a good deal. Our city and our country need a good deal with the EU.”

Goldman Sachs currently employs 6,500 people in the UK and currently has around 200 staff in Frankfurt, although it has leased a space in a Frankfurt tower block that could hold up to 1,000 staff.

It is thought that without more clarity on what a Brexit transition period will look like, banks will begin to implement their contingency plans for a “hard” Brexit.

CBI Director-General Carolyn Fairbairn said on Friday: “Decisions and certainty are now needed to protect jobs and investment on both sides.

“Both sides must put the shared interests of UK and EU citizens first by providing a roadmap for the future, with transition agreed by Christmas so the shape of the final deal can be discussed early next year.”

Get the latest Goldman Sachs stock price here.

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