Could London lose its top financial centre status after Brexit?
Businesses are worried that London could lose its status as the world’s top financial centre after Brexit, according to research.
The latest quarterly survey from the Confederation of British Industry (CBI) and professional services firm PwC showed that optimism among financial services businesses dropped for the third quarter running in the three months to December.
The result represents two years of either flat or falling sentiment, according to Reuters, which also reported that transactions were stable overall during the quarter.
Profits, meanwhile, continued to improve and are expected to do so in the current quarter.
Companies want clarity on what Britain is seeking in future trade relations, the survey showed.
Dublin, Paris, Luxembourg and Frankfurt are among the European cities vying to attract those London-based financial services businesses that will need access to EU customers once the UK has left the bloc.
Speaking to Reuters on Friday (January 26), French Finance Minister Bruno Le Maire said Paris could outstrip London to become Europe’s biggest financial hub in a matter of years.
CBI chief economist Rain Newton-Smith commented: “To restore some confidence, financial services firms absolutely must – no ifs, no buts – get as much certainty as possible on what the UK is aiming for in the Brexit negotiations, the opportunities of success and the consequences of failure.”
Today (January 29), the EU is due to approve criteria for negotiating a transition period between Brexit, set for March 2019, and the start of new trading terms.
PwC’s head of financial services, Andrew Kail, said: “The industry will need to take positive action if it is to preserve its trading status and business model [after Brexit].”