Theresa May and Philip Hammond stick up for the City in Davos after banking job threats over Brexit

Julian Harris
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Prime Minister Theresa May said she had a "very good, positive discussion" about the benefits of the City (Source: Getty)

Prime Minister Theresa May and her chancellor Philip Hammond came out fighting at Davos yesterday following reports that London’s banking sector faces job losses in the wake of Brexit.

Ahead of a crunch meeting between May and global investment banking bosses including Lloyd Blankfein, German newspaper Handelsblatt said that Blankfein’s bank – Goldman Sachs – could be set to slash its London headcount in half. Meanwhile JP Morgan CEO Jamie Dimon, when asked about the effect of Brexit, had said: “It looks like there will be more job movement than we hoped for”.

Read more: Theresa May at Davos adds another sterling boost to send the FTSE 100 down

Yet May insisted her summit with bank chiefs included “a very good, positive discussion about the benefits of the City of London, about what it is that has brought them to the City of London, and how we can continue to build on that for the future”.

She added: “I value financial services in the City of London and I want to ensure we can keep financial services in the City of London.”

Hammond told Bloomberg the financial sector is “a priority for the UK government” during upcoming Brexit negotiations, praising the industry’s “scale and depth”.

Read more: Goldman more than triples profits in fourth quarter

“Financial services is the single largest sector in terms of GVA [gross value added] and we have to ensure that’s protected in the deal that we do,” the chancellor said.

Hammond also argued that “fragmentation of the City will hurt all of Europe”, urging EU states not to “let revenge get in the way of economic logic”. According to the Telegraph, Hammond added: “Mutual access is in everyone’s interests, which is why we will seek a phased process.”

On the penultimate day of the World Economic Forum in the Swiss Alps, the government’s bullish sentiment was echoed by Barclays boss Jes Staley. “There are all sorts of reasons why I think the UK will continue to be the financial lungs for Europe,” Staley said.

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Blankfein too said he expects the City’s health to be central to Brexit talks. “The financial services industry is so important to the British economy, the thing will speak for itself,” he said. “That will become an important priority.”

However, Dutch finance minister and Eurogroup president Jeroen Dijsselbloem said he was “bewildered” by May’s plans for Brexit.

Read more: Theresa May: Brexit is not a rejection of Europe

“I have trouble understanding what the prime minister envisages for the financial sector,” he said. “The City serves all of Europe so there’s a great joint interest but continental Europe can’t accept that the City has different rules over time.”

Earlier this week May revealed her plan for Brexit, which will see the UK leave the Single Market but aim for a “customs agreement” with the EU.

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