London Remains World’s Top Financial Centre Despite Brexit

Ongoing EU Negotiations Don’t Deter Strength of the City

By: Christine Hall, GMS,

A survey this month showed that London has retained its position as the world’s top financial centre despite fears that the City will become less attractive in the wake of Brexit. 

The Z/Yen global financial centres index (GFCI), who released the survey, ranks financial centres and noted that London’s total score fell by only two points this year, the smallest decline in the top 10.

New York – London’s closest rival and expected beneficiary of the fallout from the UK’s leaving the EU – has fallen further behind amid uncertainty around free trade.  New York’s ratings score had fallen by 24 points – the largest fall among the top 15.

Frankfurt rose to 11 in the table from 23 a year ago, while Dublin moves to 30 from 33.  Not surprising, considering that both are among the top EU centres battling for business that may leave London as a result of Brexit.

The issues that financial firms have to consider when deciding where to shift employees to is not just be based on business factors.  Sir Howard Davies, chairman of Royal Bank of Scotland, on Monday pointed to the importance of education systems when moving financiers out of the UK.  He said, “The biggest issue [in relocating staff] is schools....The capacity of international secondary schools in Frankfurt is probably the biggest question on the minds of human resources directors in London”.  He indicated that employees relocating may have to leave their children at schools in the UK. 

Be sure to read more about the benefits of schooling assistance when relocating here

CEO of Deutsche Bank, John Cryan, also commented on the importance of schools in Frankfurt if it was to win business away from the UK.  He noted that Frankfurt needs, “more attractive, urban residential areas, enough international schools and a dozen additional theatres and a few hundred restaurants.”  Interestingly, since the survey was conducted Cryan’s Deutsche Bank has resolved to stay in the UK and not move employees to Frankfurt.

Davies told Bloomberg that contingency plans for the UK leaving the EU would need to be rolled out on the basis of a hard Brexit – without a trade agreement or any implementation period.  “The longer it goes and the closer it gets to March 2019, you will just have to implement that.  The clock is ticking, and in the City people are making contingency plans, and at the moment they can only make them on the basis of a hard Brexit... so the longer it goes, the more likelihood it is those ‘hard Brexit’ plans will be implemented,” said Davies. 

What we’re hearing from Saunders 1865 clients is that they expect the bulk of their staff to remain in London but they are moving a few people to EU locations in case the Brexit negotiations don’t work out too well.  I think the fake news is largely calculated to put pressure on the UK government to negotiate a sweetheart deal with the EU or perhaps forget Brexiting all together!

Whatever the outcome, Brexit is causing more international relocations and if businesses ask key talent to move abroad they better provide premier relocation support that makes the employees feel highly valued and well supported.  No firm has more experience moving financiers internationally than Saunders 1865.

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