Will Brexit really result in the loss of 75,000 finance jobs?

Brexit has been blamed for various economic and social disturbances over the last year, including rising divorce rates, Jamie Oliver’s restaurant closures and the exploding costs of the new Tottenham Hotspur stadium.

Now, the Bank of England (BoE) is the latest organisation to forecast potential problems from the UK leaving the EU. A BBC exclusive, published late last month, claimed that senior figures in the BoE believe 75,000 finance job losses will occur after Brexit.

According to the broadcaster, the BoE is using the figure as a “reasonable scenario” for the future, particularly if a ‘hard’ Brexit results in no specific UK-EU financial services deals.

But is this prediction accurate? Without the research or analysis used to arrive at the 75,000 figure – it’s difficult to say. However, let’s take a look at some of the data surrounding potential job losses in finance to see whether the estimate rings true.

What do the experts say?

Predictions on job losses veer wildly between sources.

Among the most optimistic polls was a recent Reuters survey that estimated approximately 10,000 finance roles would be relocated out of Britain or created overseas if the UK is denied single market access.

These statistics only applied to the first few years after Brexit, with interviewees acknowledging that further losses could occur over the long term. Nevertheless, BoE sources suggested to the BBC that a no-deal Brexit could see 10,000 jobs evaporate on day one of the split.

At the other end of the scale, chief executive of the London Stock Exchange Xavier Rolet suggested earlier this year that as many as 200,000 finance positions could be at risk in the UK.

Bruegel, a Brussels-based think tank, opted for the middle ground in February, calculating that around 30,000 financial sector jobs would disappear in the aftermath of Brexit.

Analysing the BoE’s data

So where does the BoE’s estimate come from? Bank officials confirmed that their forecast is roughly in line with an Oliver Wyman study released in 2016.

The report predicted that between 65,000 and 75,000 job losses would occur, with approximately 40,000 coming directly from financial services. A further 30,000 to 40,000 roles from associated services, such as legal and professional services, would also relocate. A separate Oliver Wyman briefing said between 12,000 and 17,000 jobs in wholesale banking alone would be driven out of the UK following a difficult Brexit.

The BBC noted that some employment losses would be offset by opportunities that arise after Brexit. For example, bespoke financial services will be needed across emerging market economies in the Middle East, China and India.

How many jobs will be lost?

Calculating the effect of Brexit on finance jobs is a complex challenge.

In fact, it’s unlikely that we’ll know the true impact on employment until negotiations are wrapped up and there is confirmation over the terms of the UK’s release from the EU.

Our figures show that corporate governance professionals are more than willing to take their chances abroad if Brexit affects their career progression or job prospects. Half of compliance staff claimed they would consider relocating, while 45 per cent of internal auditors said the same.

British corporate governance professionals may want to work on their language skills in the meantime, however. While 65 per cent of in-house legal staff can speak a second European language, this figure falls to approximately 20 per cent for compliance, internal audit, risk management and security employees.

Should roles move outside the UK to countries such as Germany, France, Spain and the Netherlands, candidates without the necessary linguistic capabilities may find it more difficult to secure vacancies.

Would you like to discuss Brexit job opportunities and requirements? Please contact a Barclay Simpson consultant today.