Brexit will finally deliver the jobs boom that has been promised – just not in the UK.
According to a new report, some 80,000 jobs will be created in Frankfurt because of the expected relocation of financial and banking services from London after the UK leaves the EU.
The report by lobby group Frankfurt Main Finance assesses Brexit’s impact on non-financial job growth, looking at the ripple effect on industries such as real estate, auto trade, healthcare and technical services.
It found that the expected influx of 10,000 financial services staff over the next four years will result in the creation of up to 87,667 new jobs across the region and an extra €191m (£176m) in local tax revenues per year.
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Image: Boris Johnson promised job creation during the campaign
Even the report’s most conservative scenario estimates that Brexit can lead to at least 36,000 new jobs outside of financial services and an additional £136m (£125m) in annual tax revenues.
Hubertus Vath, managing director of Frankfurt Main Finance, said it was “a real success story for all parties involved”.
But the news will be an embarrassment for Brexit campaigners in the UK, who predicted a jobs bonanza – as many as 300,000 new roles – if the country voted to leave the EU.
In the run-up to last year’s referendum, Boris Johnson cited research from the Vote Leave campaign saying the UK had missed out on 284,000 jobs due to the EU’s failure to strike trade agreements with countries such as Japan, India and the US.
But in the aftermath of Brexit, and amid uncertainty over the terms of a future relationship with the bloc, some banks have announced plans to relocate.
Financial institutions are keen to retain EU “passporting” rights, which currently allow a bank based in London to sell services across the EU. A British exit from the EU single market almost certainly means UK-based banks will lose those rights.
Image: Frankfurt is emerging a main beneficiary of the London exodus
Frankfurt – already a main financial hub that is home to the European Central Bank – is emerging as a main destination of the London exodus.
The city has secured commitments from a number of banks, including Standard Chartered, since the referendum last year.
Citigroup has also notified its bankers of plans to bolster its Frankfurt office, creating 150 jobs, while Morgan Stanley could move as many as 200 people.
JP Morgan and Goldman Sachs are set to bolster operations in various EU cities, including Frankfurt.
Japanese banks including Sumitomo Mitsui Financial Group (SMFG) have also announced plans to relocate.
And Germany’s own Deutsche Bank, the country’s largest lender, has outlined plans to move parts of its London operation to its home base of Frankfurt.