Citi Bank has become the latest financial institution to reveal its post-Brexit plans.
The US bank is set to open a European private banking hub in Luxemburg. It hopes this will mitigate the disruption businesses might face once the UK leaves the European Union in March 2019.
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Citi’s private bank services clients with more than $25m in total assets.
In a statement, the bank said it was making these plans “in the event of a hard Brexit”.
“The decision is based on what is best for our clients and what will allow us to continue to service our clients without any disruption,” said Citi Bank.
Citi Bank isn’t the only one. Here are the other companies making plans to move operations out of the UK after Brexit.
A ‘Hard’ Brexit
This week marked the end of the latest negotiation talks between the EU’s Michel Barnier and the UK’s David Davis. There are concerns that talks aren’t making sufficient progress, particularly around the issue of future trade between the UK and the European bloc.
According to a report by Dutch multinational bank, Rabobank, a hard Brexit could cost the UK £11,500 per person by 2030. This amounts to 18 percent GDP or a cumulative damage of around £400bn.
This is based on if the UK leaves the EU in 2019 without a sufficient trade deal in place.
In particular, Rabobank predicts that export volume could fall by 30 percent and consumer prices will rise by that much, negatively affecting household purchasing power.
As well, research and development (R&D) investment could decrease by 12 percent.
Brexit is causing a cloud of uncertainty
The confusion over what is happening around Brexit is having wider implications for the British economy. Earlier this week, UK chancellor Philip Hammond told the Treasury select committee that the economy was suffering due to uncertainty.
Hammond said:
“The cloud of uncertainty is acting as a temporary dampener and we need to remove it as soon as possible by making process with the negotiation process.”
Next week, a European Union summit will take place in Brussels next week. A spokesperson for UK prime minister Theresa May, told reporters that May whill have more to say on the Brexit divorce bill at the summit.
