Wednesday

24th May 2017

IMF predicts 'pain' for UK, as banks prepare London exit

  • HSBC chief says some 20 percent of activities will leave London (Photo: Gyver Chang)

Brexit will not be “without pain”, said the head of the International Monetary Fund (IMF) Christine Lagarde on Wednesday (18 January), as more reports emerged of bank relocating jobs from London.

Lagarde welcomed UK prime minister Theresa May's speech on Tuesday, telling the BBC “less uncertainty is certainly better for the UK economy and for the rest of the European Union”.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

But she noted that the IMF still thinks the British exit from the EU “will not be positive all along and without pain”.

HSBC bank CEO Stuart Gulliver told Bloomberg on Wednesday that “irrespective of Brexit … London will remain a global financial centre”, but gave a quantification of the scale of bank activities that the bank will relocate elsewhere.

“Those activities covered specifically by European legislation will need to move. Looking at our own numbers, that's about 20 percent of the revenue,” said Gulliver, who heads the world's sixth-largest bank, headquartered in London.

Some 1,000 employees could be relocated to Paris.

The Goldman Sachs Group is reportedly also thinking of moving jobs out of the City.

According to German newspaper Handelsblatt, the world's 18th-largest bank is considering cutting the number of roughly 6,000 London-based jobs by half. Around 1,000 of those would be moved to Frankfurt, the German daily said.

Swiss bank UBS said about 1,000 of its 5,000 London-based employees could be affected, Reuters reported.

In the short term, however, the UK has posted some positive figures.

The BBC reported that unemployment was at its lowest level in more than a decade, with 52,000 people finding a job in the three months to November 2016.

The UK's unemployment rate stood at 4.8 percent, according to the Office for National Statistics.

But Dutch finance minister Jeroen Dijsselbloem, who chairs the influential meetings of eurozone finance ministers, said this would change in future.

He told NRC Handelsblad newspaper on Wednesday that he expected the so-called hard Brexit as outlined by May to lead to “massive unemployment” by 2037.

“Let's speak to each other again in 20 years, and then England will be back to where it was in the seventies,” said Dijsselbloem. “Totally outdated, massive unemployment, totally impoverished.”

Theresa May outlines 'hard Brexit'

The British prime minister confirms that the UK will leave the single market when it leaves the EU and will seek a new trade deal.

EU wants Brexit talks to start the day after UK vote

EU negotiator Michel Barnier urged negotiations to begin as soon as possible, while European Council chief Donald Tusk said the EU-27's red lines will be updated once talks can move on from the divorce to the future relationship.

Column / Brexit Briefing

Tories on manoeuvres, as Labour wakes from Brexit slumber

In Labour's programme for the June election, Jeremy Corbyn claims there will be no second EU referendum and promises a form of associate membership with the EU. For the moment, it’s as far as his party can go.

News in Brief

  1. Pressure grows on climate impact of EU timber harvesting
  2. US goes after Fiat Chrysler over emissions cheat
  3. Munich police break up Europe-wide burglar clan
  4. Report: VW threatened with €19.7 billion French fine
  5. Turkey begins mass trial of suspected coup leaders
  6. Merkel's CDU consolidates lead in polls
  7. France to host Russian president
  8. Switzerland votes against nuclear power

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms

Latest News

  1. Openness over Brexit is 'political play', says EU ombudsman
  2. Le Pen's EU group in fresh spending scandal
  3. New EU right to data portability to cause headaches
  4. Cyber threats are inevitable, paralyzing impact is not
  5. Transparency complaints keep EU Ombudsman busy
  6. EU sets out criteria for relocating UK agencies
  7. EU states back bill against online hate speech
  8. Dutch coalition talks collapse again