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The estimate by EY — which mainly covers client assets and cash moved out of the UK by banks and fund managers as well as the transfer of balance sheets as operations are relocated — has increased by £200bn since the last survey in January.
Banks and investors are now being forced to finalise plans only days from the Brexit deadline, with London’s future trading relationship with the EU still in question after Theresa May failed for a second time to secure parliamentary approval for her deal last week. She now faces having to ask Brussels for an extension to Brexit, causing added uncertainty for businesses in the UK.
The number of jobs likely to move to the continent has remained steady at about 7,000, according to the EY study, which tracks the public declarations of 222 UK-based financial services firms on their intentions to restructure.
About 2,000 new Europe-based roles have already been created since the June 2016 referendum, the consultancy said.
“The relocation of 7,000 high-paid finance jobs will inevitably hit the UK tax base,” said Omar Ali, EY’s head of financial services. “Even using a conservative estimate . . . the direct loss to the Exchequer from employment taxes would be around £600m. In reality, the average salary and therefore tax loss is likely to be much higher.” [...]
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