HSBC have announced that they are moving around 1,000 jobs out of London in preparation for the issues that will surround Britain’s exit from the European Union. As well as HSBC, another of Europe’s largest banks UBS has also announced that they will be moving a similar number of staff out of the UK.
The job moves will be a blow to the government, Theresa May and her government had hoped that business would carry on as normal at least until negotiations on the terms of Britain’s exit from the trading bloc were complete. The movements will justify the thoughts of many in the remain campaign who insisted that Britain leaving the Union would lead to businesses redeploying staff to other countries to keep ties with the lucrative business Union.
The banks have taken the swift decisions as a way of countering the potentially devastating course that Mrs May has chosen. The business community has warned that a so called “Hard Brexit” would be extremely detrimental to the businesses in the UK that trade with European partners. This would most notably affect the business of the banking sector. Once out of the Union London’s financial trading centre is less likely to be the key player it is now. It sits in a prime spot between other financial centres, as an English speaking country it has large benefits in business as well as being part of the European Union and having access to that large market. This will now be subject to some restriction, and the banking community will not welcome the course that has been laid out by Mrs May.
In further devastating news global giant GoldmanSachs has reportedly also been eyeing up moving half of its staff to Frankfurt and New York. The news has been dismissed by the company, claiming that there has been no final decision on the matter. This would be a loss of a further 3,000 jobs and would add to the significant pressure on Mrs May to provide assurances over the future of one Britain’s key business sectors.
Britain’s worry appears to be great news for Frankfurt and Paris. As the other two large financial centres in Europe, both have made a play to be as appealing as possible for companies toying with the idea of leaving London’s square mile. It appears that these efforts may have paid off, as the expectation is that the jobs that leave London are going to go mostly to these two centres.
Whilst the news isn’t catastrophic, it could signal the start of a run. Companies in the sector will not want to get left high and dry when the tide goes out, and it is likely that this is the start of many such announcements by high profile businesses in the UK. Only time will tell if Mrs May can allay enough fears to prevent the trickle becoming a flow.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.