Bank of England believes Brexit could cost 75,000 finance jobs

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The Bank of England believes that up to 75,000 jobs could be lost in financial services following Britain’s departure from the European Union.

I understand senior figures at the Bank are using the number as a “reasonable scenario”, particularly if there is no specific UK-EU financial services deal.

The number could change depending on the UK’s post-Brexit trading relationship with the EU.

But the bank still expects substantial job losses.

Many jobs will move to the continent.

The Bank of England has asked banks and other financial institutions, such as hedge funds, to provide it with contingency plans in the event of Britain trading with the EU under World Trade Organisation rules – what some have described as a “hard Brexit”.

That would mean banks based in the UK losing special passporting rights to operate across the EU.

The EU could also impose other “locations specific” regulations such as where trading in trillions of pounds worth of euro-denominated financial insurance products has to be based.

That could mean trading jobs moving to Paris or Frankfurt.

There have been a number of studies on the potential employment impact of Brexit.

A poll of more than 100 finance firms by Reuters suggested the number of job losses would be just below 10,000 in the “few years” following Brexit.

I understand the bank believes the 10,000 jobs figure is likely on “day one” of Brexit if there is no deal.

The Brussels-based think tank, Bruegel, said that over time 30,000 jobs could move to the continent or be lost as London’s financial sector shrinks.

And Xavier Rolet, the chief executive of the London Stock Exchange, has suggested that over 200,000 jobs could go.

The bank believes that is too high, and its scenario over the next three-to-five years is much closer to the 2016 study by Oliver Wyman, a management consultancy which has often been quoted by banking lobby groups assessing the impact of Brexit.

Their report suggested between 65,000 and 75,000 job losses.

The study said that up to 40,000 jobs could be lost directly from financial services, with a further 30-40,000 going in associated activities such as legal work and professional services.

The report also argued that there could be opportunities from Brexit, such as developing bespoke financial services for emerging market economies across the Middle East and Asia including China and India.

Even if 75,000 jobs do go, London would still be by far the largest financial centre in Europe with over one million people employed in financial services in the capital and across the rest of Britain.

And the UK would still enjoy a healthy trade surplus in financial services with the rest of the EU worth many tens of billions of pounds.

Many also believe there will be a positive outcome to the EU negotiations as the City supports many governments and businesses on the continent in raising funds and executing global deals.

Those companies and firms would want to keep a close relationship with the UK and its well-developed global markets capacity.

Before the referendum, many banks suggested that they may move thousands of jobs.

But since then announcements have been more modest.

JP Morgan said it might have to move 4,000 jobs, but since the referendum has cut that number to around 1,000.

The Swiss bank, UBS, said it may move as few as 250 jobs after initially planning to relocate as many as 1,000.

And the chief executive of Barclays, Jess Staley, said that Brexit was no more complicated than setting up a holding company in America, which the bank was obliged to do in 2016.

More recently Lloyd Blankfein, the chief executive of Goldman Sachs, has tweeted that he will be spending “a lot more time” in Frankfurt despite the American bank building a large new HQ in London.


The Financial Conduct Authority (FCA) starts the clock on the two-year PPI reclaiming deadline.

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MILLIONS more customers could be due compensation even if they’ve been turned down before because of the Plevin court ruling, experts have warned.

The Financial Conduct Authority (FCA) today is starting the clock on the two-year PPI reclaiming deadline, as it seeks to draw a line under the mis-selling scandal that has already cost banks £27.4 billion. Experts from MoneySavingExpert (MSE) are now reminding customers this also means they can now make claims on the back of a court case known as Plevin.

The ruling means customers can get money back if their bank did not declare that at least 50 per cent of the cost of the PPI policy was in commission. As bank loans with PPI typically averaged 67 per cent and lenders almost never mentioned it, a lot of people are likely to be owed compensation. This means over 1.2 million people who’ve had past claims rejected by the bank or the ombudsman will rightly have their cases reopened due to the ruling. And it’s possible millions more will be able to claim now too, according to MSE.

If you’ve had a PPI claim rejected in the past, you should resubmit it to your PPI provider and ask them to check for undisclosed high commission. Martin Lewis, the founder of MSE, said: “Until now, you were usually only due money back from PPI if the firm had either given you an inappropriate policy, such as employment cover for the self-employed, or lied to you, like saying PPI was compulsory.

“Yet with Plevin, in most cases it’s simply a case of ‘Did you have PPI? Then you are owed money.” “So if you have a loan, credit card or other debt product that has been active at some point since 2008 and had PPI on it, then if you haven’t reclaimed already, you’re almost certainly due some money back, even if you don’t think you were mis-sold in any other way.” Around 60 million PPI policies were sold over the past 30 years – during which there have been 18.4 million complaints, according to the Financial Conduct Authority (FCA).

The FCA is urging people who are “unsure” whether they had PPI to make a claim before the deadline on August 29 2019. The claims industry believes just a third of eligible claims have been paid so far, leaving banks facing the prospect of huge payouts. Last month, Barclays set aside £700m and Lloyds Bank another £1bn to pay for further compensation claims.

Gareth Shaw, a money expert at consumer group Which?, previously said: “With banks now setting aside more money for PPI claims, it shows that the fallout from this mis-selling scandal is far from over and there are significant amounts of compensation due to consumers.”

 


Yet another bank branch earmarked for the chop

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The axe is set to fall on yet another Wigan bank branch.

The latest victim of the remorseless march of technology will be the Barclays outlet within the Asda hypermarket at Newtown.

It is one of another 54 branches it is planning to close down in the coming weeks and Newtown will cash its final cheque on October 27. The move will bring its total number of Barclays closures in 2017 to 67 across the UK.

In a statement, the bank said along with a number of high street lenders, the closures are linked to the growing demand for digital services – such as the increasing shift towards immediate online and app banking facilities. A spokesman confirmed the closures will not result in any job losses, adding:

“The number of physical Barclays branches will reduce overall but our branch network and the colleagues who work in them remain a vital part of our offering. We will continue to evolve the shape and size of our branch network, as well as improving and investing in the experience in-branch.

We also provide our customers with a range of digital channels.” There was a time when there was a bank to be found in every modest-sized Wigan community upwards – sometimes several per town and village. But it was as early as the mid-1990s that branch closures began, one of the first being the NatWest in Shevington.

Few townships have been spared since as transactions are increasingly carried out digitally. According to consumer platform Which?, over 1,000 high street bank branches were axed between January 2015 and January 2017 alone, with HSBC the worst offender.


Barclays sets aside extra £700m for PPI

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Barclays has set aside an extra £700m to meet compensation claims for mis-selling payment protection insurance.

The news came as the bank said costs related to the sale of its Africa business had pushed it into a £1.2bn loss in the first half of the year.

The sale of the Africa business was part of Barclays’ plan to focus on the UK and US.

Stripping out the losses from the Africa sale, Barclays posted a 13% rise in group pre-tax profits to £2.34bn.

Barclays chief executive Jes Staley said: “Our business is now radically simplified, the restructuring is complete, our capital ratio is within our end-state target range, and, while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders: improving group returns.”

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Barclays said it had now set aside a total of £2.1bn to deal with PPI complaints, but this was open to review.

Claims are expected to rise after the Financial Conduct Authority launches a campaign in August to encourage consumers to decide whether to act before the final deadline to bring a PPI complaint in August 2019.

Earlier this year, Barclays sold a near 34% stake in Barclays Africa Group, leaving it with just 15% of the business.

The company said the sale of the stake had led to a loss of £1.4bn, and it had also taken a £1.1bn charge on the sale.


Eight startups Rise up with Barclays

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Barclays Bank is entering formal engagements with eight of the 11 startups to pass through its latest fifteen-week accelerator programme and spinning out an internal team as a separate company.

The accelerator graduates pitched their ideas to 250 people on a demo day held at Barclays’ new Rise London base in Shoreditch.

Barclays used the event to unveil the new facility, which houses internal banking and technology teams alongside more than 40 fintech startups.

Michael Harte, Barclays group head of innovation, says: “Financial Services is experiencing a period of major technological disruption. Rise, and specifically our Accelerator, has created a platform for experimentation, with new generation businesses and entrepreneurs, to build new products, services and platforms.”

Of the eleven startups emerging from the Accelerator, Barclays is spinning out an internal team as a separate company. Dubbed Nivo, the startup offers secure mobile messaging for smarter customer service, and will pilot with Barclays Premier.

Other startups to secure deals with Barclays, include: Simudyne, which is working with the bank’s risk team on scenario planning; predictive anti-fraud and outage startup Barac has been engaged by Barclays UK and Barclays International; digital receipt outfit Flux will get to run a pilot of its technology with over 10,000 Barclays customers; operational risk firm Alyne will help the bank beef up control functions and react to new regulations more effectively.


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