Horrors – Brexit To Shrink The City By 1%, Maybe As Much As 0.3%


As we so enjoy doing around here we’re going to put a number into some sort of context. It’s said that Brexit will cause as many as 5,000 jobs to move over to the Continent. This is perhaps 1% or so of the jobs in The City. Or if we think of the wider financial services market, perhaps 0.3%. Whether or not you think this is a problem will depend upon your sense of proportion. Actually, whether you’ve got one or not.

The news itself:

John Glen told Parliament he was backing a prediction by the Bank of England that 5,000 to 10,000 jobs would vanish by Day One – 29 March 2019

In a little more detail:

The UK government expects thousands of financial services jobs to have moved to the European Union by the time of the UK’s exit from the bloc.

City minister John Glen said that the situation was “stable” as far as job movements were concerned.

However, he agreed with Bank of England estimates of 5,000 City jobs moving to the continent by March.

Sounds appalling of course, a whole 5,000? And then we need to consider.

The City itself has perhaps 300,000 people working in it. Add in the Mayfair hedge funds, Canary Wharf and so on and we get to some 500,000 people working in the wholesale financial markets (note, obviously enough, that not all who work in The City are in those banks). Losing 5,000 jobs is 1%. Less than the sort of annual variation we’ll get over the financial and business cycles that is.

Expand out to the whole financial services sector and we’ve more like 1.5 million people working. Making the job loss due to Brexit more like 0.3%.

And, well, let’s face it. These numbers are rounding errors, aren’t they? They’re not important inputs into the Brexit or no-Brexit decision at all. We can – and should – safely ignore that impact upon jobs in The City therefore.

Sure, there’re many other things we can worry about and both ways too. Offsetting sovereignty against car manufacturing, say. But the City? Ignore it.