Morgan Stanley, which currently employs over 5,000 staff in its London office alone, is reported to be considering transferring 2,000 of these to Spain or GermanyBritain’s vote to leave the European Union is already beginning to impact certain sectors of the economy, mere days after the referendum result was announced. The property and finance sectors were widely expected to experience a level of turbulence should the Brexit vote win the referendum; however, the knock-on effect of some foreign banks suggesting that they would move jobs out of the UK has also dealt a major blow to the recruitment sector.
Morgan Stanley, which currently employs over 5,000 staff in its London office alone, is reported to be considering transferring 2,000 of these to Spain or Germany. Likewise, banking giant HSBC, with a current UK-based staff tally of roughly 48,000, is rumoured to be considering moving up to 1,000 staff from its Canary Wharf office to Paris.
Jeroen Dijsselbloem, head of the Eurogroup of finance ministers, advised that the UK would pay the price of leaving the EU by having limited access to the single market; in turn, this would mean the end of ‘passporting’ – the practice of companies registered in one EEA state exercising the right to carry out business in any other EEA nation.
PageGroup saw share values plummet by a massive 52% on Friday and other well-known names such as Hays, Staffline and Robert Walters experienced losses of between 10% and 30%.
City analysts have urged caution, however, describing the moves as ‘rash’ and suggesting that fears of a mass exodus of bankers from London are exaggerated. David Buik, an analyst from Panmure Gordon, was of the opinion that London would not lose 70 years of infrastructure to ‘Mickey Mouse centres’ such as Paris or Frankfurt.
Buik further mooted that London had numerous advantages over any other financial centres, not only because it is at the centre of the time zone (GMT) but also because English is the trading language of the world. Jeremy Leach from Managing Partner Group agreed, also stressing that the vote to leave would not impact the financial services industry seriously in the long term. In his opinion, financial services will continue to be the UK’s biggest export due to its innovation, pragmatism and desire to trade.
Despite the reassurances, however, share prices in recruitment firms remained down as uncertainty lingers about the number of finance jobs that will be created when Britain leaves the union.
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