Brexit will help Frankfurt to become a Little London

7 years ago - Published in Finance, Fundamental Analysis

Brexit is set to deliver a much-heralded jobs boom with over 80,000 new roles to be created in Frankfurt.
A new report released by lobby group Frankfurt Main Finance found that the expected influx of 10,000 financial services staff over the next four years – fuelled by relocation plans and a banking exodus from London – will result in the creation of up to 87,667 new roles throughout the Rhein-Main-Region.

The study measured Brexit's effect on non-financial job growth in the city and the surrounding region across industries as diverse as real estate, auto trade, healthcare and technical services, and the rise in tax receipts for local government.
It predicts an extra €191 million (£176 million) in local tax revenues for Frankfurt per year, when accounting for the additional income tax, value-added tax and local business tax.

Even based on the report's "prudent" scenario, the Brexit ripple effect would result in at least 35,913 new jobs outside of financial services, and an additional €136 million (£125 million) in annual tax revenues for Frankfurt.
"The job growth will further advance the economic strength of Frankfurt and the region. A real success story for all parties involved," Hubertus Vath, managing director of Frankfurt Main Finance, said.

"Now, it is important to absorb and shape this growth positively. That is a challenge. However, the additional jobs also bring the funds to invest and master the challenge."

The London exodus is on track to revive the German financial sector, which at the end of 2016 accounted for around 13% of the local Frankfurt labour market compared to 15% in 2008.
"Adding 10,000 jobs to the financial industry would mean a substantial shift into this sector," the report by Frankfurt Main Finance explained.

Frankfurt and Dublin have emerged as the most popular centers and the Germany city's international schools have seen a deluge of calls as bankers anticipate a move. Morgan Stanley , Citigroup and JPMorgan say Frankfurt will be their EU trading base after Brexit.