Optimism regarding the future of the British financial sector is fading. While London holds a position of the world financial center, the surveys conducted among financial CEOs show that the sentiment is falling. From July to September, the business confidence tumbled for the third consecutive quarter. Importantly, such a continuous slump had been last seen in 2009. According to CBI and PwC, over half of the 115 surveyed companies indicated that the Brexit negatively affected the financial sector, and only 12 of them were positive about the effect of the decision to leave the EU. “With firms voicing strong concerns about the impact of Brexit, especially the risks to the wider economy in the years ahead, the government must allay their unease with clear plans for negotiations to leave the EU,” Rain Newton-Smith, CBI Chief Economist, said.
The respondents believe one of the main problems is that they lost a “passport”. This document allowed the British companies to operate across the currency bloc under general conditions. After the referendum, the new terms of working on the EU territory have to be agreed. Financial companies can’t be sure that the “passport” will remain the same. “At Lloyd’s we are very much of the view that retaining access to the EU single market is fundamental, not just for Lloyd’s but for the City in general,” the chairman of Lloyd’s John Nelson said.
Unless the problem is solved in the nearest time, the UK will probably lose its distinguished title of the global financial center.