Will high court ruling soften May's hard Brexit?

Hakan Enver 14.11.2016

“Many European cities are continuing their charm offensive, but unless there’s a hard Brexit, they shouldn’t hold their breaths for draining the City of top talent."

Morgan McKinley London Employment Monitor

November 2016

London Employment Monitor October 2016 highlights:

  • 6% decrease of jobs available, month-on-month
  • 17% decrease of jobs available, year-on-year
  • 14% decrease in professionals seeking jobs, month-on-month
  • 7% decrease in professionals seeking jobs, year-on-year

 

For City jobs, the end is far from nigh

With a mere 6% decrease in jobs month-on-month, October employment opportunities stand in stark contrast to the post-Brexit alarmist rhetoric. “There’s a tendency to blame everything on Brexit these days, so it’s encouraging to see that businesses haven’t stopped recruiting”, said Hakan Enver, Operations Director, Morgan McKinley Financial Services. 

In light of the announcement of over 20,000 redundancies by banks across mainland Europe, the figure is all the more reassuring. “It’s normal to see these types of layoffs about once a year, but it appears that London was spared in this round”, continued Enver. “The much feared recession has failed to materialise”.

Supporting the analysis was news from the Office of National Statistics (ONS) that the British economy grew by 0.5% in Q3, exceeding expert forecasts. "There is little evidence of a pronounced effect in the immediate aftermath of the vote”, the ONS said about the improved economic outlook.

Though not drastic, a 14% month-on-month decrease in professionals seeking jobs is unusual for October, when the half-term break usually frees up time for people to research new professional opportunities. “It’s been a long, arduous year full of uncertainty, so we’re seeing people’s appetite for job-seeking subside. Most have begun the wait for New Year’s bonuses early”, said Enver, who expects job seeking to grind to a halt for the final two months of the calendar year, and to pick up again after bonuses are released.

Mixed economic messages stymie employment forecasting

Conflicting data have complicated analysts’ efforts to project the employment climate ahead. The falling pound, which reached a 31 year low, was the worst-performing currency in the world in October. Though it rebounded in response to news that the government would not be able to bypass Parliament in Brexit negotiations.

The currency free fall was paired with a historic spike in the FTSE 100 index, although one point shy of its peak of 7,122. “There’s a data tag of war going on, but market confidence is a strong indicator of jobs volume, so the stock market rally shows that people have confidence in British businesses and are investing in them”, said Enver.

In High Court ruling, City sees hope for more reasonable Brexit terms

Though the High Court’s ruling is not expected to derail the triggering of Article 50, the requirement that Parliament approve the terms of Britain’s exit from the European Union is expected to dampen Prime Minister Theresa May’s zeal for a hard Brexit which, according to a leaked Treasury report, could cost the British economy £66 billion year. 

In its EU exit negotiations, the government has proven reluctant to take into account the significance of the City of London to the British economy. The reluctance has, at times, verged on hostility, worrying those whose businesses and employment depend on the preservation of passporting rights. “The opportunity for a more transparent and less hardline exit is good news for City employers and workers alike”, said Enver.

The loss of passporting would deal a blow across the board, but Enver cautions that the booming fintech industry is likely to take a disproportionately greater hit. “It’s unrealistic to expect one nationality alone to have the requisite expertise to cater to the complex needs of the fintech industry. Passporting is essential for the ability for institutions to continue to attract the best and the brightest to work in London”, he said.

Further buoying proponents of a soft Brexit was the announcement by Mark Carney that he will stay on as governor of the Bank of England through the Brexit process. Carney’s steadying hand is expected to contribute to less contentious EU divorce proceedings, and to calm market anxieties.

Bluster about job relocations continues, actual relocations fail to materialise

“Many European cities are continuing their charm offensive, but unless there’s a hard Brexit, they shouldn’t hold their breaths for draining the City of top talent”, said Enver. Enver cited linguistic and cultural gaps as the biggest relocation barrier for job seekers, and the City’s financial services infrastructure as the biggest relocation barrier for institutions themselves.

The City’s resilience was not constructed overnight. October marked the 30 year anniversary of the so-called Big Bang, when the City of London was deregulated. In the thirty years since, London grew into an international financial services powerhouse. Many believe the infrastructure that came about in its wake have made the City Brexit-proof.

Indeed, were Britain to pursue a softer Brexit in which Britain would remain in the single market, the City of London would likely survive Brexit largely unscathed. “London’s financial services sector is unique among its European counterparts. Without legislative and structural reforms on the part of the recruiting countries, they won’t be able to absorb the industry”, said Enver.

Observers look to markets to measure impact of American election

With the election of Donald Trump to serve as the next President of the United States, markets are expected to enter a period of volatility as his policies crystallise. According to Princeton economists Alan Blinder and Mark Watson “The performance of the stock market between Election Day and Inauguration Day might be taken, in part, as a statement of investor confidence — or lack thereof — in the incoming administration”. This means it’ll be all eyes on stock exchanges in the months leading up to the January changing of the guard in Washington.

Average salary change

During October 2016, the average salary change was 17%. This meant that a financial services professional leaving one organisation to go to another could, on average, secure a 17% salary increase. This figure has remained steady since July of this year, which suggests that institutions are generally hesitant in offering extravagant packages to entice people across.

Financial Services Jobs Market October 2016

Professionals Seeking New Roles October 2016

Average Change in Salary Each Month October 2016

-Ends- 

Further press information:
 
Fadi Dada or Hirrah Salim
Tel: 0207 092 0191                                    
Email: pr@morganmckinley.com

About Morgan McKinley

Morgan McKinley is a global professional services recruiter connecting specialist talent with leading employers across multiple industries and disciplines.

With offices across Ireland, the UK, EMEA, Asia and Australia, the company’s professional recruitment expertise spans banking & financial services; commerce & industry and professional services. Morgan McKinley is a preferred supplier to many of the major employers in its specialist sectors and thousands of smaller local firms. 

  • In 2015 Morgan McKinley was awarded Best Banking & Financial Services Recruitment Agency at the Recruiter Awards 2015.
  • In 2016 Morgan McKinley was globally ranked by LinkedIn as 6th of the Most Socially Engaged Staffing Agencies (Large Global Firms). 
  • In 2016 Morgan McKinley was awarded Best Temporary Recruitment Company to Work For  and Best Banking / Financial Services Recruitment Company To Work For at the Recruiter’s Investing in Talent Awards 2016.
Hakan Enver's picture
Managing Director
henver@morganmckinley.co.uk

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