London’s financial service companies continue to voice concern about the risks of the Brexit process. In an interview with the BBC, the head of Goldman Sachs Europe, Richard Gnodde, has noted that contingency plans are being drawn up to shift it’s European presence away from the city and towards the continent, depending on the outcome of the negotiations for the UK’s withdrawal from the European Union.
Should the second largest investment bank in the world move significant numbers of jobs away from the city, it would be a significant indication of London’s reducing attractiveness to big business following Brexit. With over 1 million employed in the financial services sector in the UK, it would trigger great concern for the UK economy.
No longer a gateway to the EU trading bloc
While Gnodde is clear in saying that he doesn’t want to move jobs away from London, he does say that the investment bank is already looking at increasing its presence on the continent, with the UK set to no longer be the gateway into the EU trading bloc it has built itself on being.
He told the BBC: "Obviously, a lot of people elect to have their European business concentrated in a single place, and the easiest place, certainly, for the biggest economy in the world [America] to concentrate would be the UK - the culture, the language, the special relationship, and we are an example of that.”
Cities including Frankfurt and Dublin are being mooted as new prime destinations for financial services giants like Goldman Sachs and JP Morgan.
Uncertainty caused by Brexit headlines
It’s been a turbulent week in regard to the UK’s relationship with the EU.
Following leaked reports about unsatisfactory meetings between UK Prime Minister Theresa May and the President of the European Commission Jean-Claude Juncker, and reports of a 100 million euro divorce bill for the UK, PM May alleged the EU of meddling in the on-going UK general election.
There have been calls from all sides for a calmer and more reasonable approach, and the uncertainty caused by unsavoury reports is only going to lead to the feeling of risk around Brexit for business.
Gnodde told the BBC:
"A couple of years is a long time for people to calm down and really take stock of what their long term economic interests are. And in the UK it is to try and have a very good relationship with a very big trading bloc, and for the European market to recognise what a big economy the UK is.”
Gnodde won’t be the only person from the business world to suggest that political grandstanding is going to create an uncertain climate to conduct business in.
Read the full interview on the BBC: Goldman Sachs Boss: City 'will stall' over Brexit risk.