Britain’s banks will start moving out of the UK before Christmas amid fears over leaving the European Union, according to a top banking boss.
Anthony Browne, the head of the British Bankers’ Association, wrote in The Observer that Britain’s biggest banks were likely to move within the first few months of 2017, while “many smaller banks” would do so in the next few months.
“Their hands are quivering over the relocate button,” he said.
“Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications.”
Browne said the rhetoric coming from EU and British politicians is “hardening” and uncertainty over the deal that will eventually be struck has left banks thinking they have no other option but to relocate to meet their customers needs.
He said: “Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it.”
The Government’s focus on controlling freedom of movement of people into the UK is likely to come at the expense of Britain’s right to access the single market.
Membership of the single market - a key feature of being in the European Union - is crucial to banks due to what is called “passporting services”, Sky News reports.
It allows UK-based banks to sell financial services to all EU member states unimpeded. It is also why many US investments banks base themselves in London.
Sky News reported suggestions that Goldman Sachs is drawing up plans to move 2,000 jobs out of London to another financial centre in the EU.
Despite signaling a banking exodus, Browne writes that he doesn’t believe the UK’s finance industry will be irreparably damaged.
He said: “London will survive as a global financial centre. Finance is inventive and will find a way through.
“But putting up barriers to the trade in financial services across the Channel will make us all worse off, not just in the UK but in mainland Europe.”
A Government spokesman told Sky that “large numbers of officials” are considering a range of potential impacts on financial services and other sectors.
He added: “We are determined to maintain the City’s leading position as one of the key centres of global finance as we make a success out of Brexit.”