London has retained its crown as the top global financial centre as New York City slips to second position, new figures reveal.
The report, Our Global Offer to Business: London and the UK’s competitive strengths supporting economic growth, benchmarks the performance of the world’s leading financial centres across 101 metrics including a new metric measuring business infrastructure resilience.
The report, published by the City of London Corporation, says London retained its position as a top centre for international banking, bond issuance and trading, foreign exchange, and insurance. London also increased its scores under two key competitiveness factors: regulatory and legal environment, and talent and skills.
Key highlights show London’s foreign direct investment increased 68% from 2021 to 2022 to more than £2 billion as asset managers, fintechs and investment banks opened offices in London creating 15,000 jobs in the city. London’s office vacancy rates have also decreased to 7.3% in 2022 while New York’s has grown to 22.2% – London’s office prices are also half those of New York.
The UK as a whole performs consistently well across all competitiveness measures. The UK is the world’s second largest asset management hub with £4.2tn managed for overseas clients and home to 138 unicorns (startups valued at $1 billion). This is more than France, Germany and Singapore combined.
The report states London’s regulatory quality and openness to businesses through the newly introduced Financial Services and Markets Act and the Edinburgh Reforms landed it in the top position with an overall competitiveness score of 59, down from 60 in 2023, while New York decreased its score by 3 points to 57.
Singapore placed third again dropping three points to 48 and Frankfurt sits fourth with 44 and Paris fifth with 40.
Policy Chairman of the City of London Corporation, Chris Hayward, said:
“I am pleased to see London retain its crown as the leading global financial centre after tying with New York City last year, but our competitive edge must be revived. These report findings are a testament to the success of recent regulatory changes which have sparked business optimism by removing barriers to international talent and ease of doing business.
“However, further reforms are needed. We cannot ignore the challenges we face in our capital markets ecosystem. Our flagship report, Vision for Economic Growth, outlines a long-term plan for the prosperity of the UK into the next decade – now is the time for the financial services sector to work closely with Government and regulators to realise this roadmap.”
Lord Mayor of the City of London, Professor Michael Mainelli added:
“Amid a range of macroeconomic and geopolitical challenges, this latest report shows how the UK’s financial services are key to driving growth and promoting the breadth of specialist expertise available in the City of London.
“With over 104 unicorns in London alone – many of them in the tech sector – it’s imperative that the UK strives to stake its claim as a tech superpower by maintaining its leadership in AI innovation and regulation and implementing world-leading digital transformation.”
To drive prosperity across the UK financial and professional sector over the next decade, the City of London Corporation has launched, Vision for Economic Growth. Consulting more than 300 stakeholders across the sector, the report prescribes a roadmap to reforms that can drive innovation and tackle the UK’s decline in capital markets activity.
A key proposal from the report is the creation of a financial and professional services council chaired by the Chancellor, and with representatives from regulators and the private sector which would oversee a financial services strategy, as deployed successfully in jurisdictions such as Singapore and Ireland.
Read the full report here: https://www.theglobalcity.uk/insights/global-offer-24