According to the British central bank, tens of thousands of jobs may be in danger at London City’s financial service center due to the cessation of UK membership.
BBC reported that senior Banking officials in the Bank of England considered the loss of 75,000 jobs in the city as a “reasonable scenario”, especially if no separate agreement on trade in financial services was negotiated on the terms of the termination of British EU membership.
Currently, financial service companies resident in City currently employ 350,000 indirectly more than twice as many employees.
The Bank of England has recently warned companies in the financial services sector of the City that they should be more prepared than ever for “any chance” arising from the termination of UK membership.
The British central bank, in a rather hard-spoken letter some weeks ago, warned that City’s skills were “uneven” and that the contingency plans so far had not been investigated in the matter of whether they would end up with the possible worst outcome of the Brexit process.
The call from the Bank of England considered these less favorable options that no new commercial or financial regulatory oversight agreement between London and the European Union could be reached by the end of the exit negotiations.
The central bank also requested a written confirmation from each financial services company in the city about whether their management is involved in preparing contingency plans for the termination of the British EU membership. Bank of England also asked a brief summary of the plans for these plans and assurances that contingency plans provide a good response to a wide range of possible scenarios.
London financial analysts have also drawn attention to the risks arising from the Brexit process to the London Financial Center, in particular that the UK government plans to leave Britain at the same time as EU membership ceases to be part of a single internal market for the European Union too. Some analysts say this threatens london banks to lose their service license in the euro area.
The most comprehensive study of this potential impact was compiled by Oliver Wyman Global Corporate Advisory Company.
According to the house model’s calculations, when worst scenarios are implemented, the city’s business activity, which is tied to the EU market, will fall by 40-50 percent, with an outstandard effect of 38 billion pounds (almost 14,000 billion forints) in revenue loss and 75,000 jobs in the City.
Another analyst house, Center for London, in its 98-page study on the same thing, showed that the value of exports of financial and other related services throughout London has doubled in just one decade and now reaches £ 100 billion a year ($ 350,000 billion) .
The analysis shows that 50 percent of London’s exports are exported by financial and business services.
According to analysts at Center for London, if London’s financial center loses its access to the European Union’s single market, it could lead to the disappearance of up to 70,000 city-based financial services jobs, which would be “disastrous.”
Source: MTI / Image: wikimedia.commons /