LONDON: Facing uncertainty over access to the single European market, Britain on Sunday initiated moves to calm anxieties, amid reports of banking giant HSBC moving 1,000 employees from London to Paris.
“Now, it’s a time for reassurance for business, and my message to them ever since Friday morning is there’s no need to be panicking at all. We have to have a calm approach, which is what we’ve seen since then,” UK business secretary Sajid Javid said.
Britain’s fundamentals are strong enough to weather any short-term market volatility, and that country should not rush into talks with the EU about its withdrawal from the bloc, Javid added.
Britain’s 2.2 million financial industry workers face years of uncertainty and the risk of thousands of job cuts after the country voted to quit the European Union, an upheaval that also threatens London’s dominance of finance.
Economists have slashed their forecasts for Britain, with some expecting a recession and next to no growth next year. In an early sign of problems, Moody’s Investors Service downgraded the UK outlook from “stable” to “negative.” The referendum result, it said, “will herald a prolonged period of uncertainty for the UK, with negative implications for the country’s growth outlook.”
Javid will hold a meeting with business leaders on Tuesday, a spokesman for the department of business, innovation and skills said. The meeting will be attended by leaders of the British Chambers of Commerce, Confederation of British Industry and the Federation of Small Businesses.
{{/usCountry}}Javid will hold a meeting with business leaders on Tuesday, a spokesman for the department of business, innovation and skills said. The meeting will be attended by leaders of the British Chambers of Commerce, Confederation of British Industry and the Federation of Small Businesses.
{{/usCountry}}The aftermath of Thursday’s vote to leave the EU saw the resignation of British Prime Minister David Cameron and the collapse of the pound to a 31-year low. There was pandemonium on currency, equity and oil markets.
Markets are expected to remain volatile on Monday as well.
Foreign secretary Philip Hammond told BBC that it would be “catastrophic” if Britain lost access to Europe’s 500-million strong single market. Britain outside the EU single market means the loss of “passporting”, which allows banks to operate without restriction in all EU countries.
According to BBC, the 1,000 HSBC staff expected to be moved to Paris would be those who already process payments made in euros for HSBC in Canary Wharf. But without access to the single market, more banks and financial services companies may relocate outside London.