London remains Europe's main financial hub but 'cannot afford to rest on its laurels', report finds

Thu 18 Mar 2021
Posted by: William Barns-Graham
Trade News

city of london

London has kept its position as Europe’s main financial hub, according to a study of global international finance centres published yesterday (17 March).

It is second only to New York globally and ahead of Zurich and Frankfurt in Europe, according to Z/Yen’s Global Financial Centres Index (GFCI)

Falling down

Although London maintained second place, its fall of 23 points in the index since the last report in September was the largest of all the cities in the top 10.

London is only one point ahead of third placed Shanghai, while other Asian competitors, including Hong Kong and Singapore, are also closing in on the capital.

No equivalence

There have been concerns about whether the City of London can continue to dominate European financial services as an equivalence deal maintaining its access to continental markets has not yet been agreed with the EU.

Bank of England governor Andrew Bailey has said that about 7,000 jobs have been lost to rival centres in the EU since the end of the transition period, though this is less than the 50,000 predicted.

The Telegraph has reported that international schools in Frankfurt, one of the expected beneficiaries of a predicted ‘jobs exodus’ from London, have been left with empty spaces due to bankers remaining in the capital.

UK still a hub

Despite fears over the UK’s post-Brexit grip of financial services trade, many European firms are continuing to set up shop in the country to maintain access to the its market.

Business Money reports research from service provider showing a ten-fold increase in enquiries from businesses looking to open new satellite offices in the UK.

No time for rest

Despite London maintaining its position as a financial hub, policy chair at the City of London Corporation Catherine McGuinness told City AM that the UK “cannot afford to rest on its laurels”.

“It is vital that policymakers focus on the UK’s competitiveness, by investing in infrastructure and skills across the country,” she said.