Four months on, an analysis carried out by the IPPR has revealed that there has been a marked decline in recruitment within the financial sector. The findings identified an average 10 per cent drop across Britain in the two months following the shock referendum result – a downturn trend that has not occurred in the past four years and is consequently being directly linked to Brexit.
The analysis also revealed that there has been a slump in the sector in every region of the UK, with London seeing a drop of over 13 per cent in the number of jobs advertised in the finance sector. This slump was across the board, ranging from high-level chief executive positions to administrative assistants.
The downturn comes at a time of economic uncertainty in the UK. While Theresa May is working hard to quell the nation’s concerns about the aftermath of Brexit, the access that EU markets will now be granted to the UK financial sector is certainly in question.
Although no immediate changes will be made until Article 50 has been implemented and the UK officially withdraws from the European Union, the finance sector – with many major headquarters located in the UK and especially in London – is right to be concerned. If certain ‘passporting’ rights are lost after Article 50 is triggered, many businesses may consider relocating to the continent to continue trading.
In response to this downturn, economists are imploring the government to prioritise passporting rights to allow the UK to remain in the single market. As one of the biggest and most powerful sectors in the economy, a significant decline in the financial sector will undoubtedly have wider implications on the rest of the UK economy. If the government can provide some reassurance that these issues will be addressed in the post-Brexit negotiations, this could end doubts for major players in the finance sector and potentially relieve this significant slump.
Without this reassurance, the future for the finance sector and indeed the whole British economy remains murky and unclear. In times of such uncertainty, it is unsurprising that employers within the finance sector are opting to be cautious.
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