The impact of the UK’s exit from the EU on the UK-based financial services sector

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Publication Date October 2016
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This report published in October 2016 by global management consultancy, Oliver Wyman, analyses Brexit’s potential impact on the UK-based financial services sector.

It estimates that a Brexit where the UK is outside the European Economic Area but delivers passporting and equivalence – allowing access to the Single Market on terms similar to those that UK-based firms currently have – will cause only a modest reduction in UK-based activity. In this scenario, revenues are predicted to decline by up to £2BN (2% of total wholesale and international business), 4,000 jobs would be at risk, and tax revenues would fall by less than £0.5BN per annum.

Under conditions where the UK moves to a third country arrangement with the EU, without any regulatory equivalence and its relationship with the EU is defined by terms set out under the World Trade Organization, up to 50% of EU-related activity (£20BN in revenue) and an estimated 35,000 jobs could be at risk, along with £5BN of tax revenues per annum.

When taking into consideration the knock-on impact to the whole financial services ecosyststem – the possibility of shifting of entire business units, or the closure of lines of business due to increased costs it could almost double the effect of Brexit.

Source Link http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/oct/Brexit_POV.PDF
Related Links
TheCityUK: News, 05.10.16: The impact of the UK's exit from the EU on the UK-based financial services sector https://www.thecityuk.com/news/the-impact-of-the-uks-exit-from-the-eu-on-the-uk-based-financial-services-sector/
ESO: Background information: UK prepares to protect its golden goose in EU talks / 5,500 UK-based finance firms could lose EU ‘passporting’ rights http://www.europeansources.info/record/uk-prepares-to-protect-its-golden-goose-in-eu-talks-5500-uk-based-finance-firms-could-lose-eu-passporting-rights/
ESO: In Focus: Brexit - The United Kingdom and the European Union http://www.europeansources.info/record/brexit-the-united-kingdom-and-the-european-union/

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