A vote to leave the European Union in June's "Brexit" referendum would severely damage the UK's financial services sector, leading to job losses as firms relocated away from London, the leader of the City of London Corporation has warned.
Mark Boleat, the corporation's chairman, told a legal conference in London on Thursday that Brexit was bound to have "serious consequences" for the City as a global financial centre.
The warning came as a report from Barclays forecast that, by 2026, services would account for half of of Britain's exports to the rest of the world, reaching parity with goods for the first time.
But such growth would be threatened by a 'leave' vote in the referendum, according to Mr Boleat."We would see UK-based financial institutions lose access to the single market and some would consider relocating elsewhere in the EU – not overnight but over time," he said.
"Lloyds of London, HSBC, JP Morgan, Barclays and Citigroup are among the institutions to have spoken up on the issue, warning about jobs losses or relocating some of their business overseas.
"As a recent Capital Economics study has shown, without passporting rights, exports of financial services to the EU could fall by half or about £10bn. Quite simply we have more to lose immediately post Brexit than other sectors of the economy."
"Financial and related professional services would need to take their place among all the other sectors to be negotiated. And to top this all off, the UK currently has no staff with trade negotiation experience to get the best result for the UK in these negotiations."
However, Matthew Elliott, chief executive of the Vote Leave campaign, dismissed such fears. "Mark Boleat said we would be disadvantaged if we didn't join the euro. Now he's making the same flimsy predictions about the referendum. He was wrong then and he is wrong now," he said.
"London is the financial capital of the world because of its global talent pool, its tax and legal system and the dynamic nature of our economy, not because of our EU membership. After we vote 'leave', all those characteristics will be enhanced as we take back control."
The report from Barclays highlighted the importance of the service sector to the nation's economy, predicting that the total value of exports would increase from an estimated £536 billion this year to £880 billion by 2026, with the US and Germany remaining the UK's two biggest export destinations but with China becoming increasingly important.
Matt Tuck, head of global transaction banking at Barclays, said, "These latest findings demonstrate the increasing importance of the UK as a global services hub, in addition to the traditional UK stronghold for goods."
"The UK is expected to continue performing strongly with higher-value, higher-margin products in the coming years. The outlook for global growth, and UK trade, over the coming years may appear more uncertain than it has been for some time, but as always there will be countries continuing to offer opportunities to UK exporters."
"The transatlantic connection leads the way with the US set to remain our largest individual trade partner over the next 10 years with countries in the EU another key export destination for UK companies."
Source: David Sapsted, Relocate Magazine 21.04.2016