Brexit report expects city firms to revive EU resettlement plans in 2022 | Britain’s exit from the European Union

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A financial sector report said city companies are likely to revive plans to move staff to the European Union once Covid-related travel restrictions are eased next year, as the number considering such moves continues to rise.

Of the 222 largest UK financial services firms that accounting firm EY has monitored since the 2016 referendum, 97 (44%) have confirmed they are moving staff or operations to the continent, or are considering doing so – up from 41% in January 2020.

While announcements about Brexit-related transfers have slowed in recent years, EY has indicated that more moves may have been delayed, rather than reversed, over the past year due to the Covid lockdown and compromises in working from home.

“It has been almost a year since the UK formally left the European Union, but the financial sector is still working through the hangovers of Brexit,” EY’s Omar Ali said. “While the majority of operational moves were made before the 2020 Brexit deadline – and before the pandemic – travel restrictions over the past two years have challenged the practicalities of the transfer.”

He said that companies are likely to ramp up their relocation plans over the next 12 months, assuming a decline in the number of Covid cases, amid pressure from EU authorities that have opposed the arrival of a “copper plate” to their markets, where companies keep only token presence and employees. in the block.

“Depending on the trajectory of the variable Omicron and its impact on international travel in the short term, the delayed moves should rebound over the next year, not least due to continued pressure from EU regulators,” Ali said.

It is the latest sign of the continuing impact of Brexit on the UK economy. Figures released last week showed a 16% drop in food and beverage exports during the first nine months of 2020, a drop that the industry has largely blamed on a 24% drop in sales to European Union countries.

Although the UK formally left the bloc at the start of the year, trade negotiations over checks on goods entering and leaving Northern Ireland are still ongoing, which was further complicated by the resignation of David Frost as Brexit minister at the weekend. On Sunday, it was announced that Secretary of State Liz Truss would take up his duties.

It is not clear whether Frost’s resignation could affect or delay talks about whether to give the UK financial sector “parity” – which would allow UK-based companies to serve EU clients across the continent.

“As this uncertainty persists, the risk of market fragmentation remains, which is inefficient and costly for all participants, and could ultimately harm the global competitiveness of both markets,” Ali said.

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