The UK currency ticked upwards after disputed reports of a deal on the operations of the UK’s financial services across Europe after Brexit. The UK is also launching a new crime center to crack down on money-laundering.
The pound sterling rose against both the US dollar and the euro on Thursday after reports of a deal with Brussels on financial services after Brexit.
The Times newspaper reported that under the arrangement, UK financial companies would have access to European markets so long as UK financial regulations were broadly in line with those in Europe. Quoting unnamed UK government sources, the newspaper said the deal covered both financial services and the exchange of data.
Under the reported terms of the plan, market access could not be denied unilaterally without independent arbitration and after consultation over a longer period than the current 30-day period. It was not clear from the report who would be the independent arbiter.
Brexit secretary Dominic Raab backtracked after hinting earlier this week that a wider Brexit deal was just weeks away. His Department for Exiting the European Union said, “There is no set date for the negotiations to conclude.”
Reuters news agency reported that a British government source, however, called the Times article “speculation.”
The issue of the Irish border continues, however, to be a major stumbling block to the wider Brexit agreement.
Relocations out of London have already been started by some key businesses. US global concern Goldman Sachs has started to move investment bankers and financing experts to Milan, Frankfurt and Paris. Bank of America is to make Dublin its post-Brexit headquarters for Europe and is opening a trading floor in Paris for 1,000 staff. The Bank of England thinks about 5,000 financial services jobs could be lost from the City of London.
France and Italy offer expat benefits
Research for the Financial Times found that France and Italy are offering the most generous tax breaks for London bankers making the move. Germany is reported as the least beneficial in terms of net take-home pay for expat bankers as it does not offer additional expatriate or travel deductions.
According to the FT, UK expats in France making a million euros could take home €180,000 ($204,000) more than they would in London. In Italy, it could be an extra €200,000. Germany does not offer an expat tax regime. The German constitution states that German nationals and foreigners must be treated equally for tax purposes.
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