UK Financial Firms Looking To Reduce Office Space In 2021
UNITED KINGDOM – A survey showed that financial firms in the country recorded their first increase in transaction volumes in 2 years during the 4th quarter last year even though they had to let go of staff and relook their office space usage due to the health crisis, reported Reuters on Wednesday morning (20 January, SGT).
However, the research was completed prior to the implementation of England’s 3rd lockdown in January 2021. The latest Financial Services Survey was compiled by consultancy PricewaterhouseCoopers (PwC) and employers’ group Confederation of British Industry (CBI).
“Unfortunately, the health and economic picture has sadly deteriorated since with restrictions tightening again,” said CBI’s Chief Economist Rain Newton-Smith.
In the poll, financial companies anticipate that their transaction volumes would increase at a slightly higher pace in Q1 2021. But they foresee additional reduction in manpower, while the prevalence of working from home would lead to a reconfiguration or downsizing of their office premises.
The UK’s trade deal with the European Union (EU) took effect during the start of the year, but it excludes financial services, as it’s under the oversight of the EU’s “equivalence” system.
Notably, the European Union was the largest client of the City of London.
“Meanwhile, work must continue on using existing pathways with the UK Trade and Cooperation Agreement to reach better outcomes for the financial services (sector), particularly on equivalence,” noted Newton-Smith.
A large number of financial institutions in London have established hubs in the European Union as they don’t believe that the EU would provide them much direct access under the equivalence system.
Consultancy Ernst & Young shared that more than 7,500 jobs in Britain’s financial sector have been transferred to the European Union.
“More work is yet to be done on the movement of people into roles in the EU and the migration of client contacts,” added the survey.