Goldman Sachs, the second largest investment bank in the world has warned that London could stall from the risks associated with Brexit.
Goldman Sachs Warns Of Impact on London from Brexit Process
Goldman Sachs chief executive has said his bank, which has 6,500 employees across the UK has in place a plan to move its workers depending on the direction of the negotiations.
In an interview with the BBC, Mr. Blankfein said the company had discussed with different cities in Europe in an effort to obtain office space in several locations including in Dublin and Frankfurt.
He added that both sides of Britain’s exit from the EU had high stakes to consider with regard to the economic repercussions. Implementing the deal after the final agreement is reached by the spring of 2019 will take a couple of years.
If there is no solid agreement by then, firms like Goldman would have to move jobs away from the City.
Asked whether London’s growth as a financial center in the last three decades would reverse, Mr. Blankfein said the trend would not “totally reverse.”
He added, “It will stall, it just depends on a lot of things about which we are uncertain.”
Over one million people are employed in UK’s financial sector and this sector contributes over£ 70bn a year in taxes.
Many of those employed in the financial capital, London, fear poor negotiation outcomes may move jobs to other parts of Europe.
According to Richard Gnodde, head of Goldman Sachs in Europe, the firm is planning to grow its presence in Europe by hiring hundreds of people although the bank has not indicate whether the UK will see a loss in jobs.
Mr. Blankfein said it would be important to have few barriers to financial services between Britain and the EU.
Prime Minister Theresa May has said that she is looking for a comprehensive trade agreement in place of the current access arrangements as the UK prepares to exit the single market.
However, Labor said it would cancel out Mrs. May’s plan and instead keep access to the single market on the negotiating table.
Both sides of the Brexit negotiation are taking an increasingly tough stance and it is feared that a new trade will be extremely challenging to negotiate.
The EU has also said that any deal will not offer Britain the same economic advantage it would have had were it a full member of the trading bloc.