How Brexit has already cost London’s financial hub billions

Three years and three prime ministers since the Brexit referendum, fraught negotiations and political turmoil have sapped confidence in the industry

This, in turn, has put financial firms on the verge of moving thousands of jobs – and possibly £1 trillion pounds ($1.24 trillion) of assets – out of the city

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A harvest moon is seen rising behind London’s skyscrapers on September 14. Photo: Reuters

Published: 4:43pm, 24 Sep 2019Updated: 4:43pm, 24 Sep 2019

Whether the UK leaves the European Union with no deal or clinches a last-minute agreement in the coming weeks, Brexit has already taken a toll on London’s finance industry.

Three years and three prime ministers since the vote, fraught negotiations and political turmoil have sapped confidence in the industry, putting financial firms on the verge of moving thousands of jobs – and possibly £1 trillion pounds ($1.24 trillion) of assets – out of London.

Boris Johnson, left, is Britain's third prime minister in as many years. David Cameron, right, quit as leader in 2016 after losing the Brexit vote. Photo: Reuters

There are signs of resilience: London has extended its lead in foreign-exchange interest-rate derivatives trading since the referendum, and the city remains the only European financial hub in a ranking of the world’s top 10 by commercial think tank and consultancy Z/Yen.

Still, Catherine McGuinness, chairwoman of the policy and resources committee at the City of London Corporation, which oversees the financial district, said there was little doubt that the Brexit process was hurting financial services, which account for 11 per cent of tax receipts in the UK.

Catherine McGuinness, chairwoman of the policy and resources committee at the City of London Corporation. Photo: SCMP / David Wong

“The UK does need to be very careful how it treats its services sector, because it could lose more than it needs to if it’s not,” McGuinness said in an interview. “Of course we will lose some EU-facing business,” she said adding that she is “very concerned about the shorter term, especially if we have a no-deal exit”.