An international study of financial centres finds London has held on to the second spot despite Brexit and the Covid-19 pandemic. According to PwC’s survey of 5,000 business leaders across the globe, the UK is a more attractive investment proposition than it was before Brexit.
London sits behind only New York and remains Europe’s major global financial centre, ahead of Frankfurt and Zurich. But Asian competitors Shanghai, Hong Kong and Singapore are closing on the capital.
“Our financial services sector has demonstrated resilience over the past year, providing stability amid considerable economic uncertainty. We remain confident in the City’s future and our long-term fundamentals,” Catherine McGuinness, policy chair at the City of London Corporation said. “But we cannot afford to rest on our laurels. It is vital that policymakers focus on the UK’s competitiveness, by investing in infrastructure and skills across the country.”
There have been concerns that the lack of an equivalence deal for financial services in the UK’s Brexit deal has meant the City has lost out on business.
However, talks on equivalence are on-going.
Amsterdam surpassed London as Europe’s largest share trading centre in January, trading an average of €9.2 bn shares a day.
While much was made of London losing its crown, Amsterdam is still a relative minnow placing 28th in Z/Yen’s Global Financial Centres Index.
London secured the top spot for financial sector development while being recognised for infrastructure, which includes regulation. PwC’s annual survey of global chief executives revealed the UK has overtaken India as the fourth most attractive growth target to bosses, behind the US, China and Germany.
London’s fintech offering has also been recognised coming in fifth place behind New York, Shanghai, Beijing, and Shenzhen. It has become an important part of the UK economy with London attracting more private funding than all other European cities combined.
“The UK needs to ensure our regulatory framework keeps pace with technological change and innovation,” said McGuinness.
PwC’s annual survey of global chief executives also showed 11 per cent of them selected the UK as one of their top three targets, up from nine per cent last time the survey was conducted in 2019.
Chief executives based in China have increased their interest in the UK market post-Brexit: 13 per cent selected the UK as a growth target compared to just three per cent in 2019.
“The findings are a vote of confidence in certainty and stability, which have undoubtedly increased on the trade front. Not only has the UK grown in appeal to some of our newer trade targets, but it remains an important market among our European neighbours,” PwC chairman Kevin Ellis said.
This certainty is translated into UK chief executives’ own optimism. UK executives are now even more optimistic about the global economy and their organisations’ growth prospects than their global peers.
The vast majority — 89 per cent — are confident revenue prospects will improve to some extent over the next year and the three-year outlook is even more bullish. The optimism is likely in large part due to the success of the UK’s vaccine rollout which has allowed companies to plan for normality to resume.
“CEOs are largely confident the crisis has turned a corner, this improvement is fuelling activity and momentum, as chief execs plan ahead,” Ellis said.
“We’re seeing this evident in deal activity which is building apace, and it should also translate into headcount increases in growth sectors like tech,” he added. More than half of chief executives anticipate hiring more staff over the next year while 44 per cent of global leaders expect it to increase. (The writer is our foreign correspondent based in the UK)
Andy Jalil
andyjalil@aol.com
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