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5,000 City jobs will go by Brexit day - minister

Sky News logo Sky News 11/10/2018
city of London © PA city of London

Britain's financial services minister has backed an estimate by the Bank of England that the financial services sector will have lost 5,000 jobs to Europe by day one of Brexit.

John Glen admitted that uncertainty was taking its toll on the City but told the House of Lords committee on EU financial affairs that he was doing everything possible to ensure it retains its place as a major global financial centre.

The Bank of England has been downplaying its expectations of job losses in the sector.

It initially pencilled in 10,000 to have gone by 29 March 2019 but this summer said the number might be fewer than 5,000.

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Mr Glen backed the figure but told peers that there were "many caveats" to that outlook, while stressing the importance of safeguarding the global role of the sector, which yields £72bn in taxes which are vital to investment in public services.

He said: "My sole objective in respect of the City is to ensure as much continuation as possible in respect of economic value able to be generated by the City.

"We have not seen wholesale moves of large institutions to other cities in continental Europe."

John Glen © PA John Glen

However, he said that "the French in particular have sought to leverage as much advantage due to the uncertainty".

Mr Glen said he "fully expects" that Britain and the EU will agree on a deal that introduces a transition period from next March that would avoid a disorderly Brexit.

He added: "If there was an unsatisfactory environment for the City of London then we would need to take appropriate action to defend our interests."

But Mr Glen said a no-deal Brexit might not necessarily be as hostile and difficult as some anticipate.

The comments come a day after the Bank of England said the need for action by the EU to mitigate the risk of Brexit disruption was now "pressing", cautioning that £41tn of derivative products were under threat from a cliff-edge departure.

The Bank is calling for action from authorities on the continent to ensure continuity for these contracts, reciprocating a commitment that the UK has made to try to do so.

Mr Glen told peers: "They (the EU) are taking significant risks for their own economies by not doing that.

"We're doing the right thing and we expect that they will do the right thing as well when faced with, in the end, the economic consequences of not doing so."

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