LONDON (Reuters) – Britain’s financial services will accelerate plans to move some business overseas after Prime Minister Theresa May said on Tuesday the country will quit the European Union’s single market.
Businesses have been calling for clarity on what Britain’s relationship with Europe will be before deciding how to reshape their operations, but most major firms are now set to relocate some business to ensure they can still trade with Europe.
London’s future as Europe’s financial center is one of the biggest issues in Brexit talks because it is Britain’s largest export sector and biggest source of corporate tax revenue.
“The worst case now seems to be the base case,” a senior executive at one major global bank said after May’s speech, adding that contingency planning would continue apace.
May will meet the heads of several big players, including Goldman Sachs and JP Morgan CEOs Lloyd Blankfein and Jamie Dimon, at the World Economic Forum in Davos for private talks on Thursday.
She faces an uphill struggle to persuade them not to shift some operations given Britain’s exit from the single market almost certainly means banks will lose “passporting” rights which enable them to sell products across the EU from their European hubs in London.
If finance firms in the UK lose the right to operate across Europe, 75,000 jobs may disappear and the government may lose up to 10 billion pounds in tax revenue, a report…