Philip Hammond says Brexit transition deal has ended fears of banker exodus

Philip Hammond has said the UK and the EU's agreement on a transition deal has ended fears of bankers flocking to the continent post-Brexit.

Speaking at the International Monetary's Fund's (IMF) spring conference in Washington, the chancellor struck an optimistic note on the continuing attractiveness of the City of London's financial sector even after Britain leaves the EU.

The BBC reported that Hammond was confident that the transition deal hashed out by the two sides last month had prevented banks from following through on contingency plans.

“We have dammed the flow and avoided what could have been a haemorrhaging of jobs from the UK into the EU,” he said.

Read more: A hard Brexit could cost up to 75,000 jobs

In 2016, a report published by Oliver Wyman on behalf of leading thinktank TheCityUK warned that a hard Brexit could cost between 65,000 and 75,000 jobs, plus up to £38bn in lost revenue.

Forecasts by the Bank of England's top officials on the number of job losses the City will endure as a result of Brexit have also been tweaked. 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 said there had been a "downward drift" in the number of roles expected to move towards the lower end of his estimate.

Business groups praised the "milestone" transition deal that will allow the UK to negotiate trade deals during the period – which will run until 31 December 2020 – while remaining part of the Single Market and customs union.

However, question marks still hang over the border issue in Ireland and whether financial services wil be included in the final deal.

Read more: Transition agreed: Business groups welcome "milestone" in Brexit talks

[contf] [contfnew]

CityAM

[contfnewc] [contfnewc]