HSBC begins to scale back UK operations

Up to 70,000 banking jobs could be at risk in the UK after reports emerged suggesting that HSBC has already begun plans to move 1,000 employees from London to Pairs following the Brexit vote. HSBC will reduce its operations further in the country if the UK fails to strike a deal to retain banks' access to the European single market.

Thousands of banking jobs are set to be lost from the City after the vote for Britain to leave the EU, it was claimed today.

HSBC has reportedly begun plans to move 1,000 of its employees from London to Paris because of concerns over the prospect of losing access to the European single market.

City sources have predicted that as many as 70,000 financial jobs could be moved out of Britain in the next year, after the referendum result sparked immediate market turmoil.

Moves: HSBC could transfer 1,000 employees from Canary Wharf, pictured, to Paris after the EU vote

One finance consultant told a leading careers website: 'You’re looking at 50,000 to 70,000 London finance jobs being moved overseas in the next 12 months.

'Jobs are going to be cut, and those cuts are going to start next week.'

If the UK does not strike a deal to trade freely with the remaining EU countries, HSBC will reduce its London operations and boost the size of its French office, according to the BBC.

The employees affected currently work in Canary Wharf, processing payments which are denominated in euros.

If they did move, they would join 10,000 other HSBC staff already based in Paris - around one fifth of the size of the bank's London headquarters.

HSBC has refused to comment on the reports.

Chaos: It is unclear whether or not British banks will retain access to the European financial system

Finance firms are keen to remain part of the Europe-wide 'passporting' system, which allows banks to operate anywhere on the continent as long as they have a licence from one country.

A number of other major companies, including Morgan Stanley, BNP Paribas and JPMorgan, have reportedly made plans to reduce their British business.

US-based banks with large London operations said they were 'rebalancing' in the wake of the result, threatening to move staff if they feel that is the only way to stay connected to the EU.

Most banks saw sharp falls in their shares on Friday morning after it emerged that 52 per cent of voters had backed Leave in the EU referendum.

David Cameron's successor is likely to seek continued access to the single market, probably by joining the EEA like Norway and Iceland.

However, EU leaders may insist that the UK must allow free movement of migrants if it wants to stay in the single market.

The vote to leave the EU is widely seen as a backlash against mass immigration to Britain, meaning that any such deal could be unacceptable to most voters.

Deal: The successor to David Cameron will have to lead the negotiations with the EU

A top European banking official said yesterday that the UK would need to keep freedom of movement, like Norway, in order to retain passporting rights.

François Villeroy de Galhau, governor of the Bank of France, told a radio station: 'It would be a bit paradoxical to leave the EU and apply all EU rules, but that is the solution if Britain wants to keep access to the single market.

'The City cannot keep this European passport and clearing houses cannot be located in London either.'

Jonathan Lewis of Nomura International told the Financial Times: 'I don’t see how anyone can say with any certainty that passporting will continue. Switzerland doesn’t have passporting, neither does the US, so we cannot assume we will.'

HSBC, which does much of its business in Asia, came close to moving its headquarters to Hong Kong earlier this year.

One of the reasons the firm opted to remain in London was apparently the city's status as the main financial centre of Europe, which some say could now be in doubt.

Chairman Douglas Flint said on Friday: 'The work to establish fresh terms of trade with our European and global partners will be complex and time consuming.