The City of London is going to lose business from Brexit, say fund managers

City of London
Investment managers fear for the future of the City

The vast majority of investment industry executives fear Brexit will harm the City of London, and most believe it will damage the rest of the country too – potentially leading to the breakup of the United Kingdom.

A total of 82pc of fund managers believe London will be a loser from Brexit, according to a survey by the Chartered Financial Analyst (CFA) Institute.

By contrast 69pc believe Frankfurt will win more business as a result, and 62pc believe Dublin will also benefit.

The study asked more than 2,000 investment workers about their expectations following the referendum on EU membership on 23 June.

The study looked at CFA Institute members across the globe, and the gloom about London’s prospects is less pronounced in more far flung countries.

While 60pc of EU respondents expect non-UK finance firms to reduce their presence in London, the same is true of only 44pc of non-EU investment professionals who responded to the survey.

The survey’s findings “make challenging reading for the financial services sector in the UK and for the policymakers that will work on the Brexit negotiations,” said Will Goodhart, chief executive of CFA UK, adding that sentiment among investment workers is “disturbing”.

“As we have seen in recent times, things can change rapidly, but as it stands a great deal of work will need to be done to maintain the City’s competitiveness as a global financial centre and to secure the broader economic benefits that flow from that.”

A majority also fears for the future of Britain itself: 59pc see UK fragmentation, such as Scottish independence, as “more likely than not”.

Just under half believe Britain’s departure from the EU could prompt more countries to follow suit and also break with Brussels.

The overall uncertainty following the vote will probably last for less than a year – 33pc of investment professionals believe the uncertainty will die down in under six months, and another 25pc believe it will take between six and 12 months.

A substantial minority of 26pc, however, believe it could rumble on for up to two years.

“While changes in the relative attractiveness of one financial centre over another will see some lose ground and others gain, those changes can be disruptive for clients and for investment management businesses,” said the CFA’s global president and chief executive Paul Smith.

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