City not afraid over general election result
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Version 0 of 1. City of London workers are overwhelmingly relaxed about the outcome of the general election and foreign investors are ploughing money into UK government debt at a record pace. The findings suggest that talk of financial market panic over the outcome of this week’s poll is grossly exaggerated. A survey of Square Mile workers by Hays, the recruitment firm, published today finds that 77 per cent are confident or neutral about their own job prospects after the election. This is despite the possibility of a minority Labour government which could reimpose a tax on bankers’ bonuses, or a minority Conservative administration that would hold a referendum on membership of the European Union. Simon Walker, director general of the Institute of Directors, warned last month that Labour’s proposed abolition of the non-dom tax loophole would harm finance. “There is a serious risk that large numbers of the international financial community, who have headquartered themselves in London at least in part because of our tax regime, will now exit the country,” he said. Meanwhile senior British bank executives, including the UK boss of Goldman Sachs, have warned that a British exit from the EU could force a mass relocation of banks to the Continent. Yet today’s survey suggests that the City, broadly defined, is not hugely perturbed by either prospect. “There may be some upheaval to come but, having weathered the worst financial crisis in decades City professionals are largely unworried by the temporary uncertainty created by the election,” said Mark Staniland, managing director of Hays London City. New data from the Bank of England last week also contradicted City chatter about a “buyers’ strike” on gilts. Net purchases of UK government bonds by overseas investors fell £14bn in January and February, prompting some analysts to warn that foreign investors were rebalancing their portfolios to reduce their exposure to British debt ahead of the election and its uncertain outcome. But the latest Bank data shows that there were net inflows worth £28bn in March, entirely reversing the fall over the first few months of the year and constituting the highest flow of net purchases total for any month on record.
City workers are unfazed by talk of tax rises or an EU exit Getty Images |