The US has overtaken the EU to become the UK’s main export market for financial services, accounting for over a third (34.2%) of the sectors international sales in 2020.
According to new data from TheCityUK, exports to the EU were down 6.6% over the year to 30% (£24.7bn) of the total value of the sector’s exports.
The total value of UK financial services exports was valued at £82.4bn for the year.
Global leader
The lobbying group’s annual report, ‘Key facts about the UK as an international financial centre’, also found that the UK’s financial services trade surplus in 2020 was $80.6bn.
This makes the UK a clear global leader in the sector, leading the US ($66.9bn) and Singapore ($24.8bn).
Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “Hosting one of the world’s leading financial centres provides widespread economic benefits right across the UK. The industry is a national asset."
Shift
Some experts have seen the data as evidence of growing US interest in Britain post-Brexit.
Trystan Tether, a lawyer at Bird & Bird, told the Telegraph that the UK’s financial technology industry in particular “represents an attractive market” and that he had noticed a great deal of inward investment from the US into the UK.
William Wright, from think tank New Financial, said the rise of US trade in the sector was being driven by post-Brexit barriers for UK-EU financial services trade.
Equivalence
The UK has sought to reach an equivalence deal with the EU to maintain pre-Brexit market access for the financial sector.
Observers note that this deal would effectively show that the UK and EU regard each other’s finance regulations to be equally robust.
However, the minister overseeing EU relations, Lord Frost, is reported by the FT as telling a dinner last month that the UK was “unlikely to get extensive equivalence from the EU in the next year or two” and that the government was working “on that assumption”.