Businesses in the city are likely to revive their plans to move staff to the EU once Covid-related travel restrictions ease next year, according to a financial sector report, as the number of among them considering such moves continues to increase.
Of the 222 largest UK financial services firms monitored by accounting firm EY since the 2016 referendum, 97 of them (44%) confirmed that they were relocating staff or operations to the continent, or were considering doing so. do, compared to 41% in January 2020.
While announcements of Brexit-related relocations have slowed in recent years, EY has suggested that further measures have likely been delayed, rather than reversed, over the past year due to Covid lockdowns and concessions on home work.
“It’s been almost a year since the UK officially left the European Union, but the financial sector is still suffering from the Brexit hangover,” EY’s Omar Ali said. “While the majority of operational measures were taken long before the Brexit deadline of 2020 – and before the pandemic – travel restrictions over the past two years have called into question the practicalities of the relocation. “
He said companies were likely to speed up their relocation plans over the next 12 months, assuming the number of Covid cases declines, under pressure from EU authorities who have spoken out against access “Brass” to their markets, where companies only keep a staff attendance token in the block.
“Depending on the trajectory of the Omicron variant and its impact on international travel in the short term, delays are expected to increase over the coming year, not least due to continued pressure from EU regulators “Ali said.
This is the latest sign of the continued impact of Brexit on the UK economy. Figures released last week showed a 16% drop in food and beverage exports in the first nine months of 2020, a drop the industry has largely blamed on a 24% drop in sales to countries. of the EU.
Although the UK officially left the bloc earlier this year, trade negotiations over controls on goods entering and leaving Northern Ireland continue, a matter further complicated by the resignation of David Frost as Brexit Minister this weekend. On Sunday it was announced that Foreign Minister Liz Truss would take over her case.
It is not clear whether Frost’s resignation could have an impact or delay discussions on whether the UK financial sector will be granted an ‘equivalency’ – which would allow UK-based companies to serve the UK. EU customers across the continent.
“With such lingering uncertainty, the risk of fragmented markets remains, which is inefficient, costly for all participants and could ultimately harm the global competitiveness of both markets,” Ali said.