Services strategy needed to support UK exports, says City of London

Fri 8 Sept 2023
Posted by: Phillip Adnett
Trade News

City of London skyline including the Shard

The UK should introduce a financial and professional services strategy to boost its economic performance, the City of London has said in a recent report.

The report, Vision for Economic Growth – a roadmap to prosperity, was unveiled yesterday (7 September) and advocates placing the services industry at the heart of the UK economy and use it as a means to escape the current “low-growth trap”.

Other important objectives include turning the UK into a digital first-economy, raising investment levels, making the UK a world leader in sustainable finance, and creating a knowledge hub to showcase investment and export opportunities.

Export rise

Noting that financial services exports were worth £91bn to the UK economy, the City predicted this could rise by an additional £24bn over 6 years if its recommendations were followed.

The UK remains the second largest global exporter of services and it remains an important part of the economy.

Strategy and council

As part of the financial and professional services strategy, the City said that the government should create a services council to help the sector grow.

The council would function in the same way as the existing No10 Business Council does, tracking and supporting the government’s progress towards hitting the strategy’s goals.

The creation of a knowledge and support hub that would promote UK services could have the additional benefit of encouraging more foreign direct investment, alongside increased services exports.

‘£225bn more growth’

Chris Hayward, policy chairman at City of London Corporation, said:

“This is an industry shaped vision for what the financial and professional services could look like by 2030 and beyond and how we can help contribute an additional £225bn of economic growth into the UK economy.

“This figure highlights not only the significance of UK financial and professional services to our economy, but also the urgency by which we must make these reforms to drive the country forward.”

Better ‘narrative’ on services

At the recent launch of the Institute of Export & International Trade’s (IOE&IT) Global Horizon’s report on services, export minister Lord Offord said that more needed to be done to create a better “narrative” to explain what services businesses are, including how they contribute to the wider UK economy.

Henriette Gjaerde, Customs, Trade in Services, and Trade Agreements Lead at IOE&IT, thought the City of London report also showed the continued importance of services to the UK. She said:

“"In our recent Global Horizons report, IOE&IT and Flint looked at trade in services potential across the UK and highlighted the benefits of using services to level up the UK and drive growth.

“International trade in services represents a huge part of the UK’s economy and one of the best opportunities for growth over the coming decade. Financial services, in particular, are a major part of this. It would be interesting to see what a wider services strategy would look like.”