And how can we ensure our financial services continue to thrive post-Brexit?by Vincenzo Scarpetta / October 24, 2016 / Leave a comment
Financial services account for nearly 12 per cent of the UK’s GDP and are one of few bright spots in the country’s current account balance with the rest of the EU, given that the sector produces a large and sustained trade surplus year after year (around £20 billion in 2015). It should therefore come as no surprise that the discussion over the future of UK financial services after Brexit has taken centre stage.
Particular attention is being paid to the impact of losing the so-called EU financial services “passport”—which allows UK-headquartered firms to do business across the bloc, either via local branches or on a cross-border basis. Open Europe has taken a forensic look at this issue in a new study published last week, and assessed possible alternative arrangements to ensure that UK financial services can continue thriving after Brexit.
Our analysis concludes that the importance of the passport really depends on the industry. It is relevant in some sectors, but has much less value in others. Put differently, it is exaggerated to claim that the UK’s success as a global financial centre is entirely reliant on the passport—but so is it to suggest that losing it would bear no consequences at all.