UK banks fear public, politicians set against them on Brexit

Mon Oct 24, 2016 4:37am EDT
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By Anjuli Davies, William James and Andrew MacAskill

LONDON (Reuters) - For decades, Britain's bankers have relied on their industry's outsized status in the economy to find a receptive ear in government.

But in the aftermath of the country's vote to leave the European Union, the sector that generates about a tenth of national economic output is grappling with an uncomfortable new reality where economics doesn't always trump politics.

June's vote to quit the EU has triggered a change in leadership and tone in the British government with new Prime Minister Theresa pledging an industrial revival and to build "an economy that works for everyone" - setting nerves jangling in the City of London global financial hub.

Reuters spoke to several senior bankers from big British and international banks based in the city, including some involved in discussions with the government over Brexit.

Many said their warnings about the impact of a so-called hard Brexit – where they lose their access to the European single market – were being met with scepticism by the government and accusations from some eurosceptic lawmakers that they were undermining the message that Britain can thrive outside the EU.

"It's almost as if we were back in the 1940s and we were looking for fifth columnists all over the place because people are trying to do Britain down," said Ronald Kent of the British Bankers' Association (BBA). The term "fifth column" refers to a group of people that acts secretly against the state to assist an external enemy.

The head of the BBA, Anthony Browne, said on Sunday that the public and political debate was "taking us in the wrong direction" and that big international banks were preparing to move some operations out of Britain in early 2017.

The government has pledged to execute Brexit following a vote to leave the European Union that was driven in part by a desire to curb immigration and was regarded as a repudiation of a London elite, including a banking sector still the subject of lingering public anger over its role in the financial crisis.   Continued...

Britain's Prime Minister Theresa May holds a news conference after the EU summit in Brussels, Belgium October 21, 2016. REUTERS/Eric Vidal - RTX2PV88