Dublin and Luxembourg remain the most popular EU destinations for firms moving operations as a result of Brexit, according to a survey by EY, while Paris is tops for numbers relocating.

Overall, Brexit-related activity was muted through 2021, with a fall in the numbers of announced operational moves.

However, 44% (97 out of 222) of financial services firms have moved, or plan to move, some UK operations and/or staff to the EU since the referendum, up from 41% in January 2020.

A number of the largest investment banks, which had initially projected higher numbers of staff moving to Europe in anticipation of losing access to the single market, have since revised down the number of roles they will relocate.

The total number of Brexit-related job relocations from Britain to Europe has fallen to just under 7,400, down from 7,600 in December 2020.

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EY financial services Brexit lead Fidelma Clarke said: “While the majority of operational moves were made well ahead of the 2020 Brexit deadline and before the pandemic, travel restrictions over the last two years have challenged the practicalities of relocation. Depending on the trajectory of the Omicron variant and its impact on international travel in the short term, moves that were delayed should pick up over the coming year not least due to regulatory requirements to have senior financial services employees in situ in the firms they lead.

“Many financial services firms are still far from being fully ‘post-Brexit’. The Memorandum of Understanding for the sector between the EU and UK remains unsigned, and there is not yet a definitive outcome on equivalence. While the EU has proposed an extension to temporary equivalence for UK-based clearing beyond June 2022, it is uncertain how long this will be for.

“And, although the EU has taken a pragmatic stance so far, there is no doubt that it plans to implement a long-term post-Brexit strategy. With such ongoing uncertainty, the risk of fragmented markets remains, which is inefficient and costly for all participants, and could ultimately harm the global competitiveness of both markets.”

Partner Simon MacAllister added: “For the EU and the UK to maintain their individual competitive standings on the global financial stage, they must continue to work together, while acknowledging evolving regulatory divergence.

“Just one year on from the Brexit deal, the UK must remain focused on its positioning as a leading global financial hub, while the rest of the EU will continue to build up their domestic capital markets.

"This competitive dynamic between markets will play out for many years to come and will ultimately drive better outcomes and a more transparent European financial services market.”