London continues to hold the top spot for financial and professional services in terms of overall offer when compared to other global destinations, including New York, Singapore, Hong Kong, Paris and Frankfurt, according to new figures published this morning.
London received an overall competitiveness score of 61, followed by New York (58) and Singapore (53). The rankings were rounded out with Frankfurt (45), Hong Kong (39) and Tokyo (36).
For the first time, the research included Paris as a second European comparator centre, with a competitiveness score of 41.
The research by the City of London Corporation shows that is the second annual study of the UK’s global offer to business and looks at 95 different metrics, adding new areas including green finance activity across all asset classes compared to the previous year.
“While responding to the challenges of the past twelve months, the UK continues to perform strongly across all key dimensions,” the authors wrote.
They added that the City “maintains a lead as an innovative ecosystem, its financial markets are boosted by international activity and its financial services regulatory regime remains the most favourable in the world.”
Key areas where London and the UK excel on the global stage included the UK’s international financial reach.
Against the backdrop of a challenging year, UK financial services exports increased and the UK’s trade surplus remains higher than in all other global financial centres, the report pointed out.
“London is Europe’s capital for tech and innovation, home to more than a quarter of Europe’s unicorns, and the capital increased its share of headquarters of Fortune Global 500 firms by more than a third.”Today’s report
Moreover, London and the UK remain Europe’s leading destination for investment in financial services and remain the world’s leading foreign exchange trading centre, the authors wrote.
Also, the report stated that the UK is Europe’s leading centre for asset management and its global market share is increasing again: “It also remains the biggest centre for issuance and trading of international bonds.”
More than a quarter of posts on executive committees of financial services firms in the UK are held by women, putting the UK ahead of other centres.
Still some work to do
The report also identified areas to improve the UK’s competitiveness as a financial centre, such as workforce and wider population skill levels in the west trail those in the east.
Singapore, Hong Kong and Japan scored best in this category, with the UK in the bottom half of results although ahead of Germany, France and the US.
“UK policymakers need to guarantee that its businesses continue to enjoy unrivalled access to the best of global talent,” the authors also wrote.
“Withdrawal from the EU, the end of freedom of movement and the introduction of a new immigration system have damaged perceptions of the UK as an attractive business environment for international talent in recent years,” the report said.
The researchers also pointed out that the total tax and contribution rate of UK-based financial services firms, in particular banks, is relatively high.
“The UK’s tax rates must remain internationally competitive to support the sector in continuing to create jobs and spreading prosperity across the country.”
The report further stated that “investment is needed in London and the UK’s transport infrastructure, which is crucial to build a more competitive business environment and achieve net zero.”
“Despite the challenges of the past year, the UK’s financial and professional services sector has proven resilient and supported the wider economy throughout the pandemic,” said policy Chair at the City of London Corporation, Catherine McGuinness.
“For the UK’s future success we must continue to build on our strengths, and cannot afford to be complacent.”Catherine McGuinness.
“In order to remain globally competitive, we must future-proof the sector by improving digital skills and infrastructure. Our tax rates must remain globally competitive and, crucially, we need to remain open – and be seen to be open – to the very best talent from across the globe.
“This will be key for our financial and professional services sector to fulfil its role in tackling climate change and driving the recovery from the COVID-19 pandemic.”