Key facts
- The City of London has cemented its dominance in international finance ten years after the Brexit vote.
- London's international financial activity surpasses the combined total of the next eight largest European financial centers.
- The UK received an overall score of 54 in a report grading financial hubs on market activity value.
- Domestic economic growth in the UK's financial sector was only 3%, significantly lagging behind the global average.
- The UK's business environment conditions have worsened in 10 out of 15 assessed metrics over the past decade.
- Cross-border financial flows constitute 56% of the UK's total measured financial activity.
Ten years after the United Kingdom's vote to leave the European Union, the City of London has significantly strengthened its position as a global financial hub, according to a new report by the think tank New Financial. The report indicates that London now conducts more international financial activity than the next eight largest financial centers in Europe combined.
London received an overall score of 54, a metric that grades financial hubs based on the dollar value of market activity they attract relative to the largest global player, the United States. This score far exceeds those of Germany (13), Luxembourg (9), France (9), Netherlands (7), Ireland (5), Switzerland (5), Spain (3), and Sweden (3).
Despite fears of a post-Brexit financial services exodus to the EU, London's financial sector has flourished. The total number of jobs in the City has grown to approximately 675,000 from around 500,000 previously, according to data from the Office for National Statistics. International market activity in the UK increased by 20% over the past decade, surpassing the global average of 17%.
However, the report highlights a stark contrast with domestic growth, which was a sluggish 3%, significantly below the average of 18%. New Financial warned that the City's dominant international role is "much more significant than its domestic role in financing the British economy." The UK scored only nine for its domestic financial activity, placing it fourth globally in this measure.
The report also noted that the UK's broader business environment conditions have worsened in 10 out of 15 assessed metrics over the decade, citing tax competitiveness and infrastructure quality as specific concerns. Cross-border financial flows now account for 56% of all measured financial activity in the UK, positioning it as the most international financial center globally, ahead of Hong Kong (50%), Luxembourg (45%), Singapore (31%), and the United States (26%).