UK remains world's premier financial hub

The UK remains leading exporter of financial and related professional services. However, concerns have been raised as to the effect of Brexit on the future UK financial system.

London remains top finance hub
The UK in general – and London, in particular – remains the world's leading exporter of financial and related professional services.

Financial industry a UK national asset

TheCityUK's latest compendium of economic statistics showed that the UK-based industry netted a total trade surplus of $93.6 billion (£69bn) in 2016, more than the US and Switzerland – the next two leading countries – combined.“This achievement underlines the tremendous value of the industry to the UK economy, making it a true national asset,” said the report, ‘Key Facts about the UK as an International Financial Centre 2017’.

Brexit and Britain’s financial future

But the report added that the position should not be taken for granted, particularly because of the risk that Britain could lose the 'passporting rights' that currently enable its financial services to operate freely throughout the European Union, once it leaves the bloc.The report said that the UK was the world’s leading centre for foreign exchange trading with 37 per cent of market share; the number one location for cross-border bank lending (16 per cent); and the major centre for international insurance premium income (six per cent).Additionally, UK legal services sector ranked as the largest in Europe and second only globally to the US.
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London in top spot in the global financial system

Anjalika Bardalai, chief economist and head of research at TheCityUK, said, “The UK’s place in the global financial system is unparalleled. London’s only real rival as a full-spectrum, truly global centre is New York.“However, we cannot take this position for granted. Brexit is likely to create some economic friction with our largest trading partner – the EU – and, with an increasing number of regional and specialist centres arising in Asia and elsewhere, it is vital that the UK seek new trading and investment opportunities.“While markets like China and India are growing fast, trade flows are still relatively small, indicating potential for the future.”

UK relationship with key markets including US, China and India

The report also provides an insight into the UK’s financial services trade and investment relationships with markets such as the US, China, Japan and India. While the US and the EU remain the two most important markets for the industry’s exports, developing markets also show high growth potential.Other key facts from the report include:
  • UK banking sector assets are the largest in Europe at $8 trillion (£5.9trn)
  • UK accounting services net exports were $1.6 billion (£1.2bn)
  • The UK accounts for seven per cent of global legal services fee revenue of between $580-$640 billion (£428-£472bn)
  • The value of international bonds in the UK was $2.9 trillion (£2.14trn) in 2016, the largest in the world.
  • There are a record US$11trn (£8.1trn) in assets under management in the UK
  • On average $24.3 billion of gold and $3 billion of silver is traded every day at the London Bullion Market Association.

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