During the transition period up to 2020, firms steadily made operational changes, with the number of changes rising more quickly between December 2020 and December 2021.

Out of 222 financial services firms surveyed, 97 have now moved, or plan to move, some UK operations and staff to the EU since the referendum: the rate at which they are doing so has now slowed and held over the past two quarters.

EY said it believed this was due to strategic commercial decisions being increasingly influenced by wider factors other than Brexit.

As a result, firms have started to increase the number of Brexit-linked new hires, up to 5,400 in October from just over 5,000 in the quarter before. The extra 400 jobs were mainly in London. 

The total number of announced Brexit-related job relocations from the UK to Europe is revised to 7,000, down from 7,600 in March 2021. Initially the figure was set at 12,500 jobs after the referendum; then 10,500 after Article 50 was triggered.

Omar Ali, EMEIA Financial Services Leader, EY, said that stability for staff and firms now looked more likely and any changes would become part of a normal exchange of resources. 

“While numbers have now stabilised, there will remain a degree of fluidity for some years to come, and staff and operational moves across European financial markets will continue as firms navigate ongoing geopolitical uncertainty, post-pandemic dynamics and regulatory requirements, including the ECB’s upcoming ‘desk-mapping’ review,” said Ali.

“Cross-border access remains a priority for both UK and EU firms as they look to create the most efficient, liquid markets that offer end users the best choice and prices, but overall, Brexit-related decisions are increasingly becoming integrated into businesses’ broader operational considerations in line with their wider growth and transformation strategies.” 

Other highlights from the data:

• Dublin has seen the lion’s share of relocations, with 36 firms deciding to relocate UK operations and/or staff there. Paris attracted the largest single relocation of UK employees (2,800).
• Frankfurt (19) and Paris (15) are the most popular relocation destinations for the investment banking sector.
• 24 firms have declared they will transfer just over £1.3trn of UK assets to the EU, broadly flat over the past 18 months, after rising from £800bn in early 2019.

Further reading

The questions about post-transition harmonisation between the UK and the EU will now be subject to competition in a way not seen before. Read more on this in Making London more competitive.

The Financial Services Faculty article, Is competitiveness key to the City’s future?, looks at the subject in depth.

Member firms looking for further advice can consult ICAEW resources for readying your business to the UK’s changes.

A wider set of resources are available on ICAEW’s Brexit Hub.