The recent slew of positive signs about the state of our economy following the Brexit vote is welcome news.
The fact that the OECD has raised its forecasts, that the ONS is pointing to good preliminary indicators and that groups such as Moody’s are saying the challenges are manageable are very good and very positive developments.
But it must be remembered that these are cautious, caveated early indicators that do not examine the Brexit itself, merely the impact of the government’s obligation to deliver a UK exit from the EU. Make no mistake – there is a job of work ahead as we tackle the challenges to seize the opportunities Brexit presents to grow our financial services industry.
The current debate seems to be fixated on what we might be “moving away” from. Are we going to have a “hard Brexit” and leave the Single Market? Are we going to move away from the City’s use of passporting to sell its products and services on the Continent?
It is time for the debate to start shifting to what we want to move towards. What kind of Britain do we want to be? Do we want to be a truly international economy with trading relationships across the world? If so, what political landscape, regulatory structures and global reputation will we need?
Within the UK’s financial services sector, our investment industry is of crucial importance.
The industry provides 60 per cent of all new capital raised by businesses on the markets. It is by far the biggest industry of its kind in Europe, with two-fifths of our clients located overseas. It is a supporter of 90,000 jobs in the UK, with a sizeable net export contribution.
We have an investment hub in the UK that is the foundation of the economy, fundamental to our ability to save for the future, to grow our businesses and ultimately to create an economy that works for all.
What kind of financial services sector do we want to become? The answer to this must be one that is focused on nurturing its investment hub, offering its high-quality products and services to clients around the world.
We need a Brexit that puts our investment hub at the heart of our strategy for global growth. More broadly, we must harness our strength and standing as a global business hub – for technology and innovation, for diversity, and for a culture focused on open trade and business success.
In turn, as we progress negotiations, we must mitigate against the export risks for asset managers post-Brexit, and the risk of creating additional operational complexity.
Why is this all so important? The asset management industry does not exist within a vacuum.
Through its engagement with global markets, asset managers are able to support the assets of millions of households, pension funds, insurers, charities and other investors – helping them to generate better returns and outcomes, and ultimately securing their long-term financial futures.
Our priority for the coming weeks is to ensure the role of asset managers in the success of the UK and the global economy is fully understood as negotiations progress. This is vital to secure a future in which the industry is able to flourish, and continue to support the wider economy, networks and communities which depend upon the results it delivers.