More than 440 businesses in the City of London have set up new offices in the EU in preparation for the UK leaving the Union, but very few have chosen Brussels, according to a new report by the London consultancy New Financial.
The businesses looked at, in finance and banking, either moved wholesale, opened a new office or posted staff, so as to continue trading in the EU without restrictions. But only 15 firms, or 3% of the total, chose Brussels as their new European link. By contrast, Amsterdam attracted 48, Frankfurt 63 and Luxembourg 95.
Far out in front was Dublin, with 135 firms or 25% of the total, doubtless thanks to being English-speaking. Paris came second with 102 moves.
Among companies that did make the move to Brussels were insurance underwriters Lloyd’s of London, perhaps the most venerable name on the list, as well insurance companies MS Amlin and QBE.
The list also includes the money transfer services MoneyGram and Transferwise, the stock exchange company Euronext and Euroclear, which specialize in the settlement of global securities transactions.
The news is bad for the City, as the number of moves is higher than original forecasts. To make matters worse, the exodus involved the movement out of the country of some £900 billion (€1,033 billion) in bank assets, equivalent to 10% of the entire UK banking system.
“The worse news is that this analysis is almost certainly a significant underestimate of the real picture: many firms will have slipped below our radar (particularly banks and asset managers that are already headquartered in the EU),” the report admits.
“Getting Brexit done is only the end of the beginning of the process: given the limited equivalence arrangements in place, over time we expect there to be a drip-feed of business and activity from the UK to the EU. As the EU takes a tougher line on the location of activity and individuals we expect these headline numbers to increase in future.”