The Bank of England expects Britain to lose up to 75,000 financial services jobs in the years after the country leaves the European Union in 2019, the BBC reported on Tuesday. “I understand that senior figures at the Bank are using the number as a ‘reasonable scenario’, particularly if there is no specific UK-EU financial services deal,” the BBC’s economics editor Kamal Ahmed wrote. The BoE declined to comment on the BBC report. BoE Deputy Governor Sam Woods told Reuters at the start of the month that a figure of 10,000 job losses in a Reuters survey of banks’ plans was a reasonable estimate of the initial impact of leaving the EU. The longer-term impact of Brexit on jobs in financial services was much less certain, and depends on what deal Britain struck was able to reach with the EU, Woods said. But he added that he expected London will continue to be one of the world’s largest financial centres in the coming decades after some politicians and economists predicted the City will lose its pre-eminent status as a global hub for finance.
Britain’s financial services and insurance sector employ 1.1 million people, many focused on the domestic economy rather than cross-border services that are likely to be most affected by Brexit. The 75,000 figure in the BBC report is in line with a forecast from human resources consultants Oliver Wyman of what might happen in a hard Brexit scenario. Other forecasts for job losses have ranged from about 30,000 jobs estimated by the Brussels-based Bruegel research group in February to as many as 232,000 by London Stock Exchange chief executive Xavier Rolet in January. Woods and his fellow BoE deputy governor, Jon Cunliffe, are due to speak to a British parliament committee on Wednesday about the effect of Brexit on financial services. The BoE has requested British-based financial services firms to prepare contingency plans for Brexit.
Some firms have started to move staff out of London or expand operations elsewhere in Europe, while others are waiting until early in 2018 to see if Britain and the EU agree transitional arrangements to smooth Brexit. British finance minister Philip Hammond has said the value of any transitional deal will diminish if it is not secured by early next year.