Bank of England boss lowers Brexit job loss estimate

One of the Bank of England's top officials has cut his forecast for the number of job losses the City will endure as a result of Brexit.

Deputy governor Sam Woods reiterated his forecast that one-to-two per cent of bank and insurance jobs would move out of London, equivalent to around 5,000-10,000 people.

But, speaking before the House of Commons' Exiting the EU Select Committee this morning, he said there had been a "downward drift" in the number of roles expected to move towards the lower end of his estimate.

The PRA boss also forecast that about a fifth of these jobs would be newly-created in the E27, rather than lost from Britain.

Speaking before the same committee at a later hearing, UK Finance boss Stephen Jones agreed but noted that "banks need to efficient and the idea of duplication is unlikely to be sustainable. So I fear eventually we are talking about a loss of jobs."

Meanwhile Woods told the committee, chaired by veteran Labour MP Hilary Benn, that he was confident a final deal would include financial services, saying it was "absolutely technically doable" if the political will were there, although he warned it was unlikely to be in place before October.

Although there have been concerns that the two sides' red lines were fundamentally incompatible, leaving the City with little more than a "token deal", Financial Conduct Authority boss Andrew Bailey agreed.

"I reject the view you cannot have a deal on financial services", he said. The outgoing watchdog head pointed to the inclusion of financial services within TTIP as proof of precedent, appearing to prefer outcome-based equivalence as an option. Both noted the need for the UK to retain its position as a rule-maker, with Woods saying a system can be created in which "neither party constructs the rules for the other".

Both men said the mooted transition period – which will run from the point of Brexit in March 2019 until the end of 2020 – did offer enough time for necessary work, although Woods stressed it was "a big task".

It would be easier to adapt to the new regime "if we knew what that regime was", added Bailey.

But other witnesses, particularly the Association of British Insurer's Huw Evans, raised concerns about the way immigration was being handled and claimed foreign industry workers were being turned off by the lack of clarity and enthusiasm from the government.

"I very much hope we start sending out a different message," he said.

Evans also struck a note of caution around the wider progress of negotiations. "We should not kid ourselves that we are as far forward as we think we are," he told MPs, adding the industry needs to start thinking about "a fall back".

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