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COVID is masking hit to finance from Brexit, says City of London -Breaking

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© Reuters. FILE PHOTO – People stroll through London’s City of London Financial District, Britain on September 13, 2021. REUTERS/Hannah McKay

Huw Jones

LONDON (Reuters), – On Wednesday, the City of London’s policy chief declared that Britain needs to continue its efforts at global finance leadership after Brexit.

After the EU’s departure one year ago, Britain’s financial industry lost almost all its access to it. The European Union was its largest export client.

Although the sector is now adapting well to Brexit, all the implications are still being worked out, according Catherine McGuinness. Her five-year tenure as policy chief of the “Square Mile,” financial district, ends in May.

McGuinness stated that 7,400 jobs in finance have been transferred from London to the new EU banking centers, which is far less than originally predicted. However, COVID-19 may be “misleading what’s actually going on”.

McGuinness stated to Reuters that there is no new normal.

We must put Brexit behind. McGuinness stated that what really matters is preserving our future competitive advantage.

“It is not a given that people want to travel to London.”

Amsterdam was able to surpass London and become Europe’s most important share trading hub in January.

After delays as a result of pandemic restrictions, the European Central Bank has reimposed pressure on London banks to provide adequate staffing for new EU hubs.

McGuinness indicated that London banks are frustrated at having to run duplicate UK and EU hubs. But, McGuinness claimed they still intend to have operations in London.

The promise by the finance ministry of a new chapter in financial services was welcomed. It also included proposals for making the sector more attractive to international investors. Some changes, such as the flexible listing rules, were already in place.

She said that more needs to be done in order to “get on the front foot” in global financial markets and to make the most out of Britain’s new place in the world.

McGuinness stated that “we had many consultations” and needed to see movement and action.

There was no comment from the finance ministry at this time.

The EU and UK relations need to change. However, a cooperation forum to bring together financial watchdogs from the UK and the EU has not been approved by the bloc.

Brussels said that the UK and EU should resolve the Northern Ireland dispute first so it can rebuild trust in cross-Channel financial services.

McGuinness was forced to deal with the damage that Brexit has caused to the City, at a moment when COVID-19 limitations, which were recently renewed because of the Omicron variation, have left its streets empty, placing at risk sandwiches shops, bars, and other services used daily by office workers.

She said, “I’m really optimistic that we can get people back in their offices quickly because some of these businesses have really struggled over the past couple years to survive. This may be the last straw for them.”

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