Yahoo Finance Wall Street giants warn Brexit impact on London reaching 'point of no return'
Some of Wall Street’s biggest players have warned Donald Trump’s administration that Brexit is reaching a tipping point.
They have said the grinding lack of progress on negotiations and Theresa May’s apparent tenuous grip on power in No.10 means they could soon be forced to ship thousands of jobs out of London.
A chronic lack of clarity on what deal the UK could achieve – as well as scant detail on the proposed transition agreement – would hasten plans for a worst-case scenario.
MORE: Brexit ‘pledge’ of £350m for the health service must be honoured, says NHS chief
Leading figures from the likes of JPMorgan Chase, Goldman Sachs and HSBC met the US commerce secretary Wilbur Ross in London last week, the Financial Times reports.
The banks warned him the “point of no return” was approaching rapidly when they must begin to move staff and money out of London and into Europe or back home to the US.
“The fear of a crash-out is rising,” Catherine McGuinness, policy chair of the City of London Corporation, who headed the group’s US delegation, told the FT.
“We need action, not warm words. We really need progress.”
Britain is due to formally quit the EU in March 2019. Prime minister May used a speech in Florence in September to propose a transition period of at least two years after 2019 for various customs tariffs and financial arrangements to remain in place while the finer points of a Brexit deal could be hammered out.
‘We really shouldn’t understate or underestimate what a critical moment we’re at for this sector’
While that proposal has not been dismissed out of hand, EU leaders have not exactly greeted it with open arms.
The key stumbling blocks of the divorce bill, citizens’ rights and the future of the Northern Ireland border with the South have yet to be resolved.
MORE: What is euro clearing and why does it matter to the UK and Brexit?
Banks and other financial institutions have warned for months of the potential impact on jobs, investment and the future of the City in a post-Brexit world.
McGuinness told the FT that moving some 10,000 jobs were part of the initial plans drawn up by the US banks.
“And that’s not the end of the story,” she said. “We really shouldn’t understate or underestimate what a critical moment we’re at for this sector.”
