Bank of England official warns 10,000 jobs lost on day one of Brexit

(Press Association) A Bank of England official has said 10,000 financial services jobs could go on the first day of Brexit and that an independent report predicting a loss of 75,000 roles was “plausible”.

Sam Woods, head of the Bank’s Prudential Regulation Authority (PRA), said the 75,000 figure was not produced by the Bank of England, but came from a report by consultants Oliver Wyman in 2016, which gave a credible prediction of the impact of Brexit on financial services.

Mr Woods, who has seen the Brexit contingency plans of a range of financial services companies and banks, said he expects around 10,000 jobs to be lost on day one of Britain’s break from the European Union, adding that he would be “surprised” if the number is higher than that.

Sam Woods, head of the Bank of England’s Prudential Regulation Authority

Speaking to the House of Lords EU financial affairs sub-committee, he said: “The 65,000 to 75,000 is not a Bank of England number – it’s an Oliver Wyman number.

“And how Oliver Wyman came up with that number is they looked at this scenario, which they considered the most extreme scenario, where the UK defaults to WTO status and what portion of revenues of the financial services sector might fall away.

“They thought crudely that 40% to 50% of the EU27 revenues, which are £40bn of £200bn, might fall away.

“That got them to £20bnn revenue number if you like, a 10% reduction in revenues.

“They then associated with that a 30,000 to 35,000 reduction in financial services jobs here in the UK, added to that the ecosystem effect and ancillary jobs and things like that, which hence they get to 65,000 to 75,000.

“Now that’s not a Bank of England number and we haven’t specifically endorsed that report. However, I would say that, in terms of a long-term possibility among one of many scenarios, I regard that within the plausible range of scenarios.”

Focusing on the immediate impact of Brexit, he added: “The short-term effect – what we are learning from the contingency plans which have just come in from firms – in that context, looking across all the plans we have had from banks and insurance companies … you could reasonably think of the day one movement of perhaps around 10,000.

“I would be surprised if it ends up being more than that for banks and insurance companies.

“To put that in context, that is less than 1% of financial services jobs. It is around 2% of UK bank and insurance jobs, or 2% to 3% of the City if you choose a different denominator.

“It is clearly a much lower number, it is not an insignificant number, but it is much lower.”

Mr Woods said the 10,000 jobs number was based on firms having no replacement for passporting rights and no access to a transition period at the end of March 2019.