Big investment banks with their European headquarters in London will start the process of moving jobs from the UK within weeks of the government triggering Brexit, a faster timeline than their public messages of patience would imply, according to people briefed on the plans being drawn up by four of the biggest firms.

Dismayed by the lack of a clear plan to protect the UK’s status as a global financial hub, executives are planning for the worst – that they will lose the right to sell services freely around the European Union from the City, said sources who asked not to be identified as the plans are supposed to be confidential.

Facing a long process with potential waits for regulatory approvals before workers can pack their bags, banks want to start quickly in order to have new or expanded offices set up in Europe before the end of the two-year Brexit negotiation period.

Theresa May says she has an 'open mind' over Brexit negotiations

“This year is all about understanding potential scenarios, your options, and what your contingency plans are,” said Andrew Gray, head of Brexit for UK financial services at PwC, which is advising banks on how best to respond to Brexit. “Some plans will take time to execute, and firms can’t afford to wait until 1 January 2019, and risk not being able to do business.”

Discouraging Talks

While UK Prime Minister Theresa May has said she will fight for the City of London to retain its passporting rights, bankers and lawyers say she faces an uphill battle trying to win concessions from EU partners still smarting from the outcome of the 23 June vote.

Bank executives are privately discouraged that seven weeks after the referendum, the ministers in charge of negotiating the best deal for the UK believe they can retain the benefits of being in the single market without accepting the free movement of EU citizens, the people said.

6 ways Britain leaving the EU will affect you Show all 6 1 /6 6 ways Britain leaving the EU will affect you 6 ways Britain leaving the EU will affect you More expensive foreign holidays The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more nito100 6 ways Britain leaving the EU will affect you No immediate change in immigration status The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay Getty 6 ways Britain leaving the EU will affect you Higher inflation A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum AFP/Getty Images 6 ways Britain leaving the EU will affect you Interest rates might rise The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output Getty 6 ways Britain leaving the EU will affect you Did somebody say recession? Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018 AFP/Getty Images 6 ways Britain leaving the EU will affect you And we wouldn’t even get our money back All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget Getty Images

Banks are in a race against each other to secure the best office space and accommodation for the thousands of workers they would eventually move from the UK, given the limited number of suitable destinations in those cities. They also want to be first in line with the local regulators, who will likely struggle to cope with an influx of investment banks asking permission to set up shop.

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An isolated London would be a particularly acute problem for Wall Street banks given the significant revenue they generate from EU clients. EU staff from 87 per cent of US investment banks are located in the UK, which is also home to 78 per cent of the region’s capital markets activity, according to think tank New Financial.

Avoiding Logjams

Before the referendum, Jamie Dimon, JPMorgan chief executive said he would relocate as many as 4,000 employees to the continent after Brexit.

Morgan Stanley may move as many as 1,000 employees out of the UK, while Goldman Sachs Group and Citigroup indicated they would also shift people abroad. European banks including HSBC and Deutsche Bank said they may have to move people or activities to France and Germany.

Bank bosses have struck a softer note in public since the vote, saying that they would wait and see how the UK’s negotiations with the EU panned out before making any decisions on the number of employees or timing.

To be sure, beginning the process won’t mean employees would immediately start moving, the people said. The first steps would involve setting up a new legal entity structure with a home base inside the EU, applying to the local regulator for a banking license and getting approval for the internal models they use to calculate their capital requirements, a process which can take years on its own.

The banks would need to coordinate with one another on their moving plans to avoid any logjam with local regulators, said one of the people. Those discussions could be facilitated by one of the industry lobby groups such as TheCityUK, the person said.

Banks could yet delay their departure from the UK if the British government was able to secure a lengthy transition period from the current rules to whatever fresh terms of trade are agreed with the EU, said the people. That would need to be agreed before the UK actually triggered Article 50, which is expected to happen in 2017.

UK ministers may decide to wait until after France and Germany hold national elections next year before pulling the trigger on Brexit, three of the people said.

Britain’s exit from the EU is going to be a long, drawn out process, said Rupert Harrison, of BlackRock, and a former adviser George Osborne. That will probably result in the UK government trading away banks’ passporting rights in return for ongoing access to the single market for other parts of the economy, he said.

“If banks are moving some of these jobs, I think that is entirely a rational thing to do for them,” Harrison said in interview with Bloomberg TV’s Francine Lacqua. “It is very hard to see a way to thread through this that retains these single-market access roles.”