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UK Economics

Bank of England STILL pushing Project Fear as 75,000 jobs to go – but Big banks STAY PUT

THE BANK of England believes 75,000 jobs will be lost in the City after the UK leaves the EU, despite both HSBC and UBS predicting minimal changes.

A senior figure at the Bank of England has reportedly told the BBC that the Bank thinks 75,000 is a ‘reasonable estimate’ of job losses in the UK financial sector after Brexit, particularly if Britain fails to broker a decent exit deal.This contradicts comments made by Deputy BoE Governor Sam Woods earlier this month, who told news agency Reuters that 10,000 jobs was a ‘reasonable’ estimate of the number of workers that might be moved to Europe after March 2019.

With the predictions of job losses in the City of London – Europe’s largest financial centre – ranging from 220,000 to zero, it seems the BoE has fallen somewhere in the middle.

The 75,000 scenario is in line with management consultancy Oliver Wyman, which last year published a report estimating this number of job losses in a hard Brexit scenario.

LondonGETTY

The Bank of England reportedly considers 75,000 job losses to be a reasonable estimate post-Brexit


LondonGETTY

Britain’s financial services and insurance sector is a leader in Europe and employs 1.1m people


It may be less than 1,000 employees moved to Europe, but it’s up to 1,000

Iain Mackay

Other predictions include 30,000 job losses, estimated by the Brussels-based Bruegel research group in February.The wild variation in predictions has led to accusations of scare mongering, as EU advocates attempt to paint a bleak economic picture for the UK post-Brexit.

However, in the last week multi-national banks HSBC and UBS have both said that in-fact, they each expect less than 1,000 jobs to go.

“It may be less than 1,000 employees, but it’s up to 1,000,” HSBC’s finance director Iain Mackay told reporters on Monday.

He added that the bank had so far incurred $12 million (£9.1 million) in costs in relation to Brexit, mostly spent on legal advice regarding contingency planning, and expects to spend $200 to $300 million on relocation costs.In 2016 HSBC’s revenue totalled $48 billion, while it manages $2.4 trillion of assets – roughly the total annual GDP of France.

HSBC has echoed a statement from boss of Swiss bank UBS Sergio Ermotti, who last week said that increased “regulatory and political clarifications” were making it “more and more unlikely” that the bank would move up to 1,000 jobs to Europe as originally threatened.

Speaking to reporters following the publication of the bank’s latest results on Friday, Ermotti said that UBS would finalise its Brexit plans “in the next few weeks.”

He added that the bank’s target was “to keep as many people as we can in London” and that UBS has all of the licences it needs in place at its Frankfurt bank in order to continue all of its EU businesses after Brexit.And David Johnson, founding director of currency specialist Halo Financial, said:

“There is an unmistakable pro-EU bias in the City of London, so when the Bank of England warns that 75,000 jobs could be lost if the UK leaves the EU, it is bound to get plenty of press coverage.

“Even with that reduction, though, London would still be by far the largest financial centre in Europe and would still dwarf Frankfurt and Paris.

“Add in the report from property company, Savills, that investment into London could well set a record this year, and the doom-laden Bank of England headline starts to look a little off kilter.

“It would appear more people are convinced that London will weather the storm than are running for the exits.”

Britain’s financial services and insurance sector employs 1.1 million people.

According to Reuters, many of these are focused on the domestic economy rather than cross-border services that are likely to be most affected by Brexit.

https://www.express.co.uk/finance/city/873618/BoE-says-75-000-city-jobs-to-go-after-Brexit-but-big-banks-STAY-PUT

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