By Huw Jones
LONDON (Reuters) – The City of London’s policy chief said on Wednesday that Britain’s attempt to get on the front foot in global finance after Brexit needs sustained impetus from the government.
Britain’s financial sector lost most of its access to the European Union, which had been its single biggest export customer, after it completed its departure from the bloc a year ago.
While the sector has adapted smoothly to Brexit, the full implications were still working their way through, said Catherine McGuinness, whose five-year term as policy chief for the “Square Mile” financial district ends in May.
Some 7,400 finance jobs, far fewer than initially predicted, have moved from London to new EU banking hubs, but COVID-19 “may be masking what’s really going on”, McGuinness said.
“We are certainly not at a new normal,” McGuinness told Reuters.
“We need to put Brexit behind us. What really matters now is maintaining our competitive edge in future,” McGuinness said.
“It’s not a given that people will want to come to London.”
Amsterdam overtook London to became Europe’s biggest share trading centre last January, and some derivatives business left for New York.
But the European Central Bank has resumed pressure on banks in London to adequately staff their new EU hubs after delays due to pandemic restrictions.
McGuinness said banks in London are voicing frustration at the cost and time of running duplicate UK and EU hubs, though they are still committed to having operations in the capital, McGuinness said.
She welcomed the finance ministry’s promise of a “new chapter” in financial services and its proposals to make the financial sector more globally attractive, with some changes such as flexible listing rules already in place.
More needs to be done to get on the “front foot” in global finance and make the most of Britain’s “new place in the world”, she said.
“We had a lot of consultations and we need to see action and movement,” McGuinness said.
The finance ministry had no immediate comment.
Relations with the EU also need to be put on a “new footing” though a proposed cooperation forum for UK and EU financial watchdogs has yet to be signed off by the bloc.
Brussels has said it wants the spat between the EU and Britain over the Northern Ireland protocol sorted out first before it can begin rebuilding trust in cross-Channel finance.
McGuinness has had to grapple with damage from Brexit to the City at a time when COVID-19 restrictions, recently renewed due to the Omicron variant, have emptied its streets, putting at risk sandwich shops, bars and other services used by office workers.
“I am really hopeful we can get people back to their offices soon because for some of these businesses that have really struggled to survive over the last couple of years, this may be the final straw for some,” she said.
(Reporting by Huw Jones; Editing by Hugh Lawson)
