As London's financial institutions face an uncertain future, the latest Global Financial Centres Index is a timely reminder that for all the political uncertainty, the City still holds a number of aces in its hand.
The 22nd edition of the international study offers a valuable snapshot of the state of the global financial landscape. Once again, London retains the number one spot – having extended its lead over rivals including New York and Singapore. No EU city makes the top 10. In the main fields of competitiveness analysed by the report (business environment, human capital, infrastructure, financial sector development and regulation), London sweeps the board.
Read more: London tops smarts cities index
The categories are further broken down into 20 different areas, including rule of law, quality of life, built environment, market liquidity, innovation and the macroeconomic environment. It speaks to London’s strengths, both inherent and hard-won, that the capital performs so strongly across the diverse range of competitiveness indicators, but the rankings must also focus minds on the challenges facing the City. London’s winning characteristics are well documented in the analysis that accompanies the study.
However, while they place the capital at a global advantage, they by no means guarantee its future dominance, or its continued success. Indeed, while the latest findings are encouraging, they will be of less interest to the City than the vexing question of the UK’s future relationship with the EU.
As we have reported throughout the summer, frustration is mounting at the absence of a government position paper on financial services. Ministers insist that a paper is coming, but the City deserves answers on matters relating to transitional arrangements.
At the very least, it deserves to know what the government is hoping to achieve. It took years for London to acquire its role as a global leader in financial and professional services, and a hard or messy Brexit won’t rob it of that status overnight.
But lingering uncertainty combined with a mismanaged exit from the EU could, over time, trigger a slow bleed that turns the City’s swagger to a limp. It’s high time the government recognised the importance of the financial services sector, engaged with the City’s concerns and published its proposals for a transitional deal with the EU.
Read more: These are Europe's most dynamic cities