UK finance firms to boost GDP by £62bn in six years
THE UK’S financial services sector has the potential to add £62bn to GDP by 2020, with practically half of the rise in productivity expected to come from London, according to research published this morning.
The new report by PwC argues that the industry can add 0.2 percentage points to GDP growth for each of the next six years, creating nearly 50,000 jobs in the sector.
The research is based on a “relatively benign” forecast, in which the UK’s financial firms grow at a moderate pace, around 75 per cent as fast as they did before the crisis.
PwC also say that this could have a big spillover effect into the wider economy, raising GDP by two or three per cent in total by the end of the decade, and creating 265,000 jobs in the UK.
In terms of gross value added (GVA), a major measure of productivity, PwC expects a £50.3bn expansion by 2020, £24.9bn of which would stem from London, up 7.22 per cent from current levels.
Scotland would have the second-fastest expansion, with GVA rising by 3.66 per cent in the same period. However, PwC stress that such an estimate is based on the country remaining part of the UK, and that a yes vote in this year’s independence referendum, then there would be effects on the financial sector which have not been calculated.
“The link between UK financial services sector health and the health of the overall UK economy is undeniable. As trust is earned and rebuilt, we will hopefully see a return to banks being recognised positively for their role in society and their contribution to the UK economy,” said Kevin Burrowes, financial services leader at PwC.