London’s status as a global financial hub has been left “fragile” by Brexit, the boss of Goldman Sachs has warned.
David Solomon, chairman and chief executive of the bank, said it is diverting staff away from London to rival cities such as Paris, Frankfurt and Munich.
Speaking to Sky’s The Master Investor Podcast with Wilfred Frost, he said: “The financial industry is still driven by talent and capital formation, and those things are much more mobile than they were 25 years ago.
“London continues to be an important financial centre. But because of Brexit, because of the way the world’s evolving, the talent that was more centred here is more mobile.
“We as a firm have many more people on the continent.”
Detailing the bank’s shift in focus from London to other European cities, Mr Solomon said: “If you go back, you know, ten years ago, I think we probably had 80 people in Paris. You know, we have 400 people in Paris now… And so in Goldman Sachs today, if you’re in Europe, you can live in London, you can live in Paris, you can live in Germany, in Frankfurt or Munich, you can live in Italy, you can live in Switzerland.
“And we’ve got, you know, real offices. You just have to recognise that talent is more mobile.”
Goldman Sachs has around 6,000 employees in the UK.
Mr Solomon also warned Rachel Reeves against further tax hikes, particularly on the wealthy, which could see more of the bank’s staff leave the UK.
Amid mounting calls for the chancellor to unveil a wealth tax, with Ms Reeves looking for ways to raise billions in her Budget this autumn, Mr Solomon warned: “If you don’t set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that.
“Incentives matter if you create tax policy or incentives that push people away, you harm your economy.”
The bank chief said he has “sympathy” for the chancellor ahead of her Budget, welcoming her focus on economic growth.
“And now we have to see the action steps that actually follow through and encourage that,” he added.
Home Office minister Seema Malhotra blamed former prime minister Liz Truss for undermining Britain as a place to do business.
Ms Malhotra told Sky News: “There’s been a sense of urgency coming out of the Treasury since we came into government last year, and that is because we saw the damage over 14 years, but most recently, since the Liz truss premiership, the damage that was done to our economy, to our reputation around the world, to the confidence of investors.
“And what I’ve seen while we’ve been in government… is a government that is extremely and completely focused on how we rebuild our economy, but also how we work with our the City of London, with our financial services, because this is a jewel in the crown for the UK,
“And I believe that with the chancellor and with our government working in partnership, once again, with British industry, that we will see that confidence restored.”
