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Despite the likelihood of a harder-than-expected Brexit, and the certain loss of the so-called passport, which would allow financial services to be sold freely across the EU, the feared large-scale exodus of firms and financiers from London does not seem to be under way. Why?

It is now well over three years since the United Kingdom voted, by a narrow but significant margin, to leave the European Union. Yet we still have no idea what kind of economic relationship the UK will have with the 27 countries it leaves behind. (Some of the debate in London recalls in its insularity the apocryphal 1930s headline: “Fog in Channel: Continent Cut Off.”) Insofar as one can hazard a guess, the most likely outcome seems to be a more remote relationship than “Leave” supporters talked about in the referendum campaign and than most commentators envisaged shortly after the vote.

But, despite that change of direction, and the certain loss of the so-called passport, which would allow financial services to be sold freely across the EU, the feared large-scale exodus of firms and financiers from London does not seem to be under way. The French bakeries and German sausage shops are still doing a roaring trade. Why?

Two very recent pieces of evidence give a sense of what is happening on the ground, while politicians continue to argue. The accounting firm EY has monitored firms’ declared intentions in response to Brexit over the last three years. The latest survey, published in mid-September, indicates that 40% of firms plan to move some of their operations and staff out of London, while 60% of larger firms have announced such moves.

But the number of jobs that are to be moved from London to another European city is now only 7,000, far lower than estimates made a couple of years ago. Interestingly, the two locations that, according to EY, have benefited most so far are Dublin and Luxembourg. That is good news for London, because both are niche centers and unlikely to emerge as powerful rivals across the full spectrum of financial activities. Had Paris and Frankfurt been the principal beneficiaries, the long-term consequences could be far more threatening. Their marketing campaigns are so far yielding only modest returns.

There is, however, some more worrying news for London in the survey. Firms confirm that they are likely to move assets out of the UK on a large scale. The latest estimate is that around £1 trillion ($1.2 trillion) of assets under management may move to other centers when the UK leaves the EU. Many employees who are responsible for these assets will remain in London for now, but that could change over time.

And a second data point suggests that London’s reputation is beginning to suffer. A consultancy called Z/Yen has published a Global Financial Centres Index every six months for more than a decade. The latest ranking, in mid-September, showed that while London remains second only to New York globally, its relative position has been slipping. New York’s lead has more than doubled in the last six months. London’s relative decline has been sharper than any other of the top centers, and Paris has moved up.

Indeed, the gap between London and Paris has fallen to 45 points from 88 points in March (the top mark is just below 800). The European Banking Authority’s move to Paris, and Bank of America’s decision to relocate its euro trading there, are probably the main factors behind that change of perception.

Moving from survey to anecdote, managers say they have found it harder than expected to persuade senior staff to move. Even Italians and French who have been asked to relocate back to Milan or Paris are often reluctant to agree. Their children are settled in school, their spouse or partner has a non-mobile job in London, or they can’t bear to find themselves so close again to Mom and Dad!

More significantly, perhaps, a global market is a complex ecosystem. The traders may move, but will the IT infrastructure and support be as sophisticated elsewhere as it is in London? Will skilled consultants and lawyers be available on demand, as they are in the Square Mile?

These factors are making firms hesitant about large-scale moves. Instead, many have been looking for workarounds to overcome the regulatory problems they will certainly encounter once the UK leaves the single market.

Moreover, the politics of Brexit remain fraught and complex, and there is a small chance that the UK will hold another referendum and reverse course, which would render nugatory the £4.2 billion that the government vowed to spend on contingency plans. But the most likely outcome is that the UK stumbles toward the exit and falls untidily over the threshold, without a structural new relationship or a lengthy transition period.

Thereafter, we will see how Europe’s financial markets evolve. But the central expectation, given what we have seen so far, must be that Europe will migrate to a multi-polar financial model, with different centers, small and large, exploiting their respective comparative advantages. Dublin and Luxembourg will strengthen their positions, especially in asset management. The European Central Bank will act as a pole of attraction for Frankfurt. Euro-denominated transactions will increasingly take place in the eurozone, while London looks likely to remain, for the foreseeable future, Europe’s window on the wider world.1

There will be a price to pay for users of financial services, as a dominant single center is almost certainly more efficient and cheaper. But, after Brexit, that solution will no longer be available in London, and there is certainly no consensus among the other 27 countries on a single alternative.