As Post-Brexit trade negotiations are set to be underway, pressure is amounting to strike the right deal to avoid further loss of banking jobs in London. The Bank of England are claiming that up to 75,000 jobs could be lost in the financial sector.
A possible outcome of the trade deal could be ‘location specific regulations’, insisting where trading should be based. This would directly affect offices in London, which could be made to relocate to other European cities such as Paris and Frankfurt.
Goldman Sachs Chief Executive Lloyd Blankfein has tweeted suggesting that the bank’s Frankfurt office will become a prominent centre for European affairs post-Brexit rather than their current London HQ. This follows earlier news that Goldman Sachs are already planning their new leasing space in the German financial capital which would lead to an increase of up to 1,000 staff from the 200 that currently work in the city.
Blankfein also commented on the volatility of the UK-EU trade deal by tweeting: “In London. GS still investing in our big new Euro headquarters here. Expecting/hoping to fill it up, but so much outside our control. #Brexit”. Although the company are still developing their new 10-storey London building, due to be finished in March 2019, its future is still undecided. Goldman Sachs can choose to sublet space once it is completed rather than occupying the whole building which it may well choose to do if the post-Brexit deals are unsuccessful.
Like many banks, Blankfein is concerned about the trade deal that the UK will attempt to negotiate with the EU, and acknowledges that its outcome is looking particularly uncertain. The clock is ticking for a deal to be made, and Goldman Sachs has suggested that if a trade deal is not negotiated by Christmas, a ‘hard Brexit’ will be assumed and the move of staff and offices to Frankfurt and other European cities will follow imminently. Similarly, Sam Woods, a deputy governor at the Bank of England, has also stated that the later an agreement after Christmas, the less likely an agreement will be made to benefit City firms.
In a post-Brexit world, Frankfurt is tipped to be the most popular choice for banks and financial services moving staff from London. Reuters are among the other banks that have decided to also lease new offices in the city, which would also accommodate up to 1,000 staff. However, this is not the case for all major banks. J P Morgan originally announced before the referendum that it would have to move 4,000 jobs but it has now claimed it will only move 1,000. Meanwhile, the City of London Corporation are keeping a tally of official announcements from City firms about contingency plans. According to the Corporation, more than 9,750 potential jobs have been announced to be under threat and many of them will move to Frankfurt.