London Touts Financial Dominance With Brexit Talks In Balance
Brexit talks may be hanging in the balance but London remains a dominant financial center and a critical pillar of the U.K. economy.
The U.K. is the world’s biggest net exporter of financial services, with its $77 billion trade surplus in 2019 outpacing the U.S., Switzerland, Singapore and countries across the European Union, according to a report Wednesday by TheCityUK, a lobbying group for the industry. That figure hits $102 billion when including related offerings like legal and accounting services.
The report also said the U.K.’s fintech sector had 6.6 billion pounds ($8.8 billion) of revenue and employed 76,500 people as of the first half of 2020.
“Metrics such as these are a testament to the U.K.’s global competitive advantage in financial services and underscore the industry’s status as a significant national asset,” Anjalika Bardalai, the group’s chief economist and head of research, said in a statement.
Still, the U.K.’s departure from the European Union will likely diminish some of that dominance. At the end of 2019, 34% of U.K. financial exports were to the EU, the report said. The U.S. accounted for 30% of the total and Asian countries 16%.
With no financial services deal in sight, banks including JPMorgan Chase & Co. and Morgan Stanley are moving hundreds of billions of dollars in assets to the EU. If the EU continues to bar access to London firms for share- and derivatives-trading, more business may soon move and chip away at the British financial hub.
“There’s no clarity as to how the future will look, but there is some certainty that it will not look the same as it does today,” Mairead McGuinness, European commissioner for financial services, told Euronews Tuesday. “And for very good reasons, because the United Kingdom has voted to leave the European Union.”
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