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Murray McKintosh News Article

BlackRock: Brexit Would Harm Financial Services Sector

Written by:

Jessica Kavanagh

The date has now been set for what could end up being the most important referendum in British history. On 23 June (2016) we will decide, once and for all, whether to remain part of the European Union or drop out and go it alone. Here at Murray McIntosh, we are as interested in the outcome of the referendum as anyone else. Financial services recruitment agencies like ours will be affected regardless of how the vote turns out.

There are those on both sides of the argument claiming that a British exit from the EU, also known as a Brexit, will have a significant impact on our economy. New York-based BlackRock, one of the most respected global financial services companies in the world, is on the side against an exit. They believe leaving the EU would harm our financial services sector measurably. 

BlackRock Vice Chairman Philipp Hildebrand recently told Reuters that his company believes a Brexit could lead to unemployment, inflation, and less growth and investment in the UK. It might also result in a significant retraction of the financial services sector as a consequence of the other factors. If the economy does not grow and expand as it should, there will be less need for investment and less activity within the financial services arena. 

A Question of Trade
Regardless of the position you take on the issue, the result of a potential exit rests on one thing: trade. About half of the UK's economic output is somehow linked to trade within the European Union. This includes manufacturing productivity, financial investments, business services, etc. The question is whether a Brexit would harm trade. 

If so, the sterling could be devalued and trade deficits increase. This would obviously do exactly what BlackRock has anticipated in terms of higher unemployment, higher inflation, and less financial activity. But if trade remains unharmed, as proponents of the Brexit are counting on, leaving the European Union would barely have an effect on our economy. 

There is obviously no way to tell what will happen until a decision is made one way or the other. Murray McIntosh and other financial services recruitment agencies realise we have to be prepared in the event of either decision. As for the average voter, there is only a short amount of time to make sure one is informed. 

 

Sources: 


  1. Reuters – http://uk.reuters.com/article/uk-britain-eu-financialservices-blackroc-idUKKCN0W40YJ

 

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