Our global offer to business
Cover image: Artist’s impression of the 2030 London skyline Our global offer to business: London and the UK’s competitive strengths supporting economic growth Fourth edition Click to start
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 2 strengths supporting economic growth Contents Foreword Michael Mainelli Chris Hayward Executive summary 3 The Rt Hon the Lord Mayor of Policy Chairman of the the City of London City of London Corporation 1 Innovative ecosystem 5 1.1 Sustainability 6 1.2 Tech and innovation 8 How our 昀椀nancial services industry Improvements across our regulatory in the UK’s tech sector, the fastest- performs and competes against and legal regime and harnessing growing jobs market in the City 10 global peers has never been more of top global talent also helped to of London. 2 Reach of 昀椀nancial activity important. Amidst a range of o昀昀set any negative trends. The UK These are all steps in the right macroeconomic and geopolitical is seen as one of the most business- direction, yet challenges remain. 14 challenges, this latest report shows friendly markets in the world, 3 Regulatory environment Reduced 昀椀nancial activity is a direct 3.1 Regulatory stability and innovation 15 how the UK’s 昀椀nancial services are opening its doors to international headwind to growth. We also face key to driving growth and promoting 昀椀rms and highly skilled workers. The 3.2 Tax 16 a digital skills gap and cost-of-living the breadth of specialist expertise introduction of the Financial Services crisis. This year the City of London 3.3 Market access 17 available in the City of London. and Markets Act 2023 unblocked Corporation launched Vision for regulatory bottlenecks, allowing Now in its fourth year, our global Economic Growth (V4EG) – a roadmap 18 regulated 昀椀nancial activity to 昀氀ow. o昀昀er to business: London and to prosperity, which highlighted the 4 Access to talent and skills UK regulators are now tasked with the UK’s competitive strengths, importance of developing a long- 4.1 Skills, hiring and training 19 ensuring the UK 昀椀nancial services provides a robust assessment of term strategy to drive growth across 4.2 International talent 21 industry retains its competitive edge, the international 昀椀nancial services UK 昀椀nancial services for years to 4.3 Quality of life 22 a goal we strongly support. industry. London continues to come. This requires government, top the ranking of global 昀椀nancial Challenges arising from COVID-19 regulators, and the industry to work 23 centres, with strong and consistent and Brexit have been addressed. together to support a competitive 5 Resilient business infrastructure 5.1 Global business connectivity 24 performance across the 昀椀ve New immigration legislation is 昀椀nancial services industry. The key dimensions. ensuring top global talent can come City Corporation is proud to use its 5.2 O昀케ces and working trends 25 to the UK via the highly skilled unique position in bringing together Against a global backdrop of in昀氀ation 5.3 Digital and cyber 26 and entrepreneur visa streams, government and industry to facilitate and soaring interest rates in 2022, all and thousands of the world’s this goal and support economic the 昀椀nancial centres in this study saw brightest people have taken up the growth across the UK. a decline in capital markets activity. Methodology 27 opportunity. Global investors are But London retained its position con昀椀dent in the UK’s strengths; as a top centre for international they have invested more than £2bn banking, bond issuance and trading, in opening UK o昀케ces and created foreign exchange, and insurance. 15,000 jobs. Many of those jobs are
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 3 strengths supporting economic growth Executive summary This is the fourth edition of the City of London Corporation’s international competitiveness study, which uses more than 100 independent metrics to evaluate the top seven global 昀椀nancial centres (GFCs). The period studied in this report began with Russia’s invasion of Ukraine, which kick-started a new economic era of rampant in昀氀ation and the fastest cycle of interest rate hikes in history. The battle to tame in昀氀ation undertaken by governments and central banks around the world has presented challenges and opportunities alike for the 昀椀nancial and professional services (FPS) industry. The UK’s FPS industry is in a strong of 昀椀nancial activity’ dimension decreased in 2022. Investment fund position. It employs 2.4 million is o昀昀set by gains in the ‘enabling AUM fell in 2022 for the 昀椀rst time people, generates 12%, or £278bn, regulatory and legal environment’ since 2008 as bond investments of UK GDP and contributes £100bn and ‘talent and skills’ dimensions. lost signi昀椀cant value. These trends continued through 2023. to UK taxes. Financial services (FS) Bottlenecks in business activity workers generate an average of caused by Brexit and the COVID-19 New metrics have been added and £177,000 in economic output, making pandemic have been cleared – some metrics have been updated them some of the most productive regulatory e昀케ciency, immigration in this year’s study. We have workers in the UK. Foreign investors policies and workers returning to the added metrics on pension quality, see the opportunity on o昀昀er: foreign o昀케ce have all improved London’s business complexity, the gender direct investment (FDI) increased business ecosystem. gap, visa access, and o昀케ce vacancies 68% from 2021 to more than £2bn This position cannot be taken for to capture the post-pandemic as asset managers, 昀椀ntechs and granted, however. Some of the business environment. investment banks opened o昀케ces in fundamentals driving the growth London. This investment also created Our analytical model captures of 昀椀nancial services are in decline. 15,000 jobs. direction of travel as well as absolute This analysis is based on relative size, and this is the driver of some The 2024 City of London positioning and therefore shows changes in the ranking. For example, Benchmarking analysis shows that that the challenges facing London in last year’s analysis New York London is the top GFC in the world. and the UK are global trends. Higher bene昀椀ted from the COVID-19 period London’s overall competitiveness interest rates and tighter monetary bull market, which saw huge amounts 2.4m £278bn £100bn score in 2024 is the same as it was policy have reduced 昀椀nancial market of 昀椀nancial market activity and a in 2023, but the score of each of the activity everywhere. Equity trading spike in 昀椀nancial asset prices, but People employed by of UK GDP generated by of UK taxes generated by underlying dimensions has changed. activity, international bond issuance, that trend has reversed as many the UK’s FPS industry the UK’s FPS industry (12%) the UK’s FPS industry For example, a decline in the ‘reach and derivatives trading volume all
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 4 strengths supporting economic growth equities returned to their pre-COVID domestic market. Balancing To ensure London remains valuations and deal-making reduced domestic consumer protection with competitive in the next decade, 100 M o signi昀椀cantly. All the GFCs in our wholesale global 昀椀nance players the City of London Corporation has 59 57 48 44 40 31 31 s t c analysis saw a reduction in their does not allow for a one-size-昀椀ts- launched Vision for Economic Growth (-1) (-3) (-3) (-2) (-3) (-6) (-4) o mp ‘reach of 昀椀nancial activity’ score all regulatory regime, something (V4EG), a roadmap that outlines e as capital market trading volumes UK regulators must address to recommendations to drive growth ti ti retreated with rising interest rates. improve competitiveness. and improve outcomes for the FS v e London’s score fell due to a decrease industry. This report references the London’s recovery from the pandemic in investment fund AUM and capital ‘big moves’ recommended in the 80 has also contributed to a healthier markets activity, although foreign V4EG report and links them to the FPS ecosystem. London o昀케ces have exchange volumes increased. Net data that will demonstrate progress. undergone inspired renovations to FS exports remained consistent and The change in economic cycle, create spaces that encourage workers FDI increased. competition for global talent and cost back into the o昀케ce. This can be seen of living crisis are all real obstacles London gained in the ‘talent and in London’s low o昀케ce vacancy rates, facing the FPS industry, in the UK and skills’ dimension as new immigration full restaurants, and busy transport abroad. By taking regular stock of legislation came into e昀昀ect which networks. The City of London’s the UK’s position, through the lens of 60 improved the UK’s attractiveness and cultural o昀昀ering is also a magnet objective data and analysis, we will be accessibility to international talent. for visitors. in a position to meet these head-on The UK and US share the title for and thrive on the global stage. most expensive work visa, however, UK skilled worker visas are more accessible and are processed more swiftly. The UK has the second best 40 pension system amongst GFCs and 10th best in the world, in terms of Vision for Economic Growth bene昀椀ts, regulations and adapting to demographic change. This is a - a roadmap to prosperity: positive for UK and international workers and contributes to a better The City of London Corporation competitiveness. The Big Moves quality of life for citizens. (CoLC) launched Vision for are referenced throughout 20 Economic Growth (V4EG) in this report. London also improved its score in September 2023. This ongoing the ’enabling legal and regulatory L environment’ dimension. The UK work presents a roadmap to Big move: ea s t regulatory regime is highly regarded reinforce the UK’s international Develop a UK FPS strategy and c o around the world and ranks second competitiveness for years to FPS Partnership Council to mp in our analysis. Singapore ranks in come. V4EG convenes a steering support it. The impact of this by e ti 昀椀rst place due to its proactive and board of leading FPS 昀椀gures 2030 will be that Government’s ti v market-aware regulatory approach. and engaged with more than 0 e clearly de昀椀ned strategy for UK- 300 companies across London Although the UK and Singapore based FPS maximises the sector’s London New York City Singapore Frankfurt Paris Hong Kong Tokyo to de昀椀ne a series of ‘big moves’ 昀椀nancial industries share similarities contribution to UK jobs and (UK) (US) (Germany) (France) (Japan) to drive growth and improve –both are international 昀椀nance hubs economic growth. – the UK is a far larger global market 2024 score 2023 score and also has a large sophisticated
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 5 strengths supporting economic growth 1. Innovative ecosystem The UK’s 昀椀nancial and professional services (FPS) industry is an essential cog in one of the world’s most innovative ecosystems. It drives growth and enables effective investment, while supporting innovative solutions to global challenges. FPS supports the tech industry and helps to achieve sustainability targets through capital allocation, deal-making, legal and accounting services, and providing the insurance necessary to drive groundbreaking projects. Businesses located in the UK bene昀椀t from a globally- connected market, highly-skilled domestic and international talent, both domestically and from around the world, and a supportive and ambitious policy environment. Metrics – Fintech investment – Number of M&As involving sustainable companies – Number of 昀椀ntech investment deals – Number of FPS 昀椀rms with science-based climate targets – Number of unicorns – Signatories to UN Principles of Sustainable Insurance (UN PSI) – Sandboxes (e.g. regulatory or digital) (yes/no) – Signatories to UN Principles of Responsible Banking – Open banking (yes/no) (UN PRI) – Share of FPS and tech-relevant graduates – Sustainable stock exchange (yes/no) – Digital skills among population – Stock exchange with a sustainable bond segment – Adoption of 昀椀ntech (yes/no) – Number of patent applications, per resident – Sustainable 昀椀nance taxonomy (yes/no) – Green and ESG bonds, overall amount outstanding – Better World MBA ranking – Green and ESG bonds, annual issuance – CDP A-list ranking – Sovereign green bond (yes/no) – Signatories to Net Zero Banking Alliance – ESG scores of listed companies – Signatories to Race to Net Zero – Size of domiciled sustainable funds – Signatories to Asset Owners Alliance – Size of sustainable loan issuance
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 6 strengths supporting economic growth 1.1 Sustainability highest number of 昀椀rms signed up to The UK 昀椀nancial services industry UK 昀椀nancial services companies are science-based climate targets with 86 has embraced the challenge of committed to sustainable operations The UK is a leader in sustainable 昀椀nance. CEOs and investors alike have embraced the transitioning the economy to net- and investments. signatories to SBTi; the US is second with 35 signatories. Institutional principles of ESG and this commitment is re昀氀ected in company ESG scores nationwide. zero emissions. More FPS 昀椀rms UK companies are leaders in have committed to net zero and investors in the UK are also committing to environmental targets. London ranks 昀椀rst in the Global Green Finance Index, and UK businesses have green targets here than in any committed to ESG investing principles Financial services companies in the through the UN Net Zero Asset committed to environmental targets around emissions and net zero. All this adds up other country. UK have signed up to important Owner Alliance, accounting for 11 of The transition to net zero is global programmes to reduce their to greater opportunity for investors with a sustainability mandate – the UK is home to the 74 global signatories. Not only ambitious. In 2019, the UK own emissions as well as those of one of the world’s largest green investor bases. The FPS industry plays a critical role in do these commitments help achieve government announced a target of investee companies. In 2022, 768 environmental outcomes; they also net zero greenhouse gas emissions by UK companies had signed up to the green 昀椀nance ecosystem, providing specialist support including capital structuring, drive a greater range of sustainable 2050, achievable through reduction the UN Principles of Responsible insurance, and consultancy, which contributes to services exports. investment options in the UK. and removal of emissions through Investing (PRI) – fewer than in 2021 Source technologies like carbon capture. due to mergers and consolidation Success will require concerted e昀昀orts of businesses. The UK has the UNEPFI 2023, UN Climate Change 2023 from government and industry, and the FPS industry plays a pivotal Sustainable 昀椀nance score role. To date, UK industry has demonstrated a clear commitment to 4,312 768 tackling climate change. The nation is London New York City Singapore Frankfurt Paris Hong Kong Tokyo the undisputed leader in companies UK companies committed UK 昀椀nancial services 昀椀rms commited to net zero targets with to net zero signed up to UN PRI (UK) (US) (Germany) (France) (Japan) 4,312 signatories in 2022. The US is second with 759 signatories. The UK also has the highest number of banks in the UN Net Zero Banking Alliance. The City of London is proud Vision for Economic Growth to contribute to advancing this important target through the Net Big move: Big move: Zero Delivery Summit, a high-pro昀椀le conference designed to keep the Create the conditions to scale Scale innovative approaches to net zero momentum going between and accelerate 昀椀nancing for a sustainable 昀椀nance. The UK has a COP meetings. just transition towards a low- history of pioneering sustainable Source carbon economy. Financial and 昀椀nance. There is an opportunity professional services already play for it to cultivate high-integrity UNFCCC Race to Zero 2022, UNNZBA 2022 an important role in supporting voluntary carbon markets, high- 69 60 13 51 52 16 33 the transition and will continue to integrity nature markets and do so. natural capital approaches.
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 7 strengths supporting economic growth UK listed companies achieve high ESG scores UK investment in green funds has increased London New York City Singapore Frankfurt Paris Hong Kong Tokyo London New York City Singapore Frankfurt Paris Hong Kong Tokyo 80 £400bn £350bn £300bn 70 £250bn £150bn 60 £100bn £50bn 50 £0bn 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 There are 524 bonds issued on the popular ESG funds in the UK are investment quali昀椀cations and The UK is an international The UK has a deep pool of LSEG Sustainable Bond Market (SBM) domiciled in cross-border markets more than 12,000 昀椀nancial hub for sustainable sustainable 昀椀nance professionals investment opportunities. by 136 issuers in 39 countries, which such as Luxembourg which makes and graduates, which ensures services professionals have either have raised more than £210bn since measuring the true size of the UK high ESG investment standards registered for or completed ESG- Companies listed on UK stock February 2021. In 2022, 77 bonds sustainable investor market harder. focused programmes. and a pipeline of future exchanges were among the 昀椀rst to were admitted to the SBM, raising The Investment Association reports sustainability talent. Warwick Business School increased embrace ESG commitments and have over £42bn. However, the UK lags that around half of the £10tn of fund 12,000 its position in 2022 and is now therefore achieved high ESG scores Professional bodies from across other GFCs in total green bond assets managed in the UK follows second in the Better World MBA for the past 昀椀ve years. In 2022, the the UK FPS industry are signatories issuance. Both the US and EU issue ESG principles. FS professionals have average ESG score of the 100 largest to the Green Finance Education Ranking, after adding two further higher amounts of sovereign and Source completed or registered sustainability-focused modules to companies in the UK was 77 (out of Charter, a framework introduced quasi-sovereign bonds, for example for ESG quali昀椀cations its MBA. However, a gap in specialist 100). The London Stock Exchange in 2019 to integrate green and US green municipal bonds and LSEG 2023, IA 2023, Re昀椀nitiv 2023 faculty has slowed progress across all Group (LSEG) introduced the ‘Green sustainable 昀椀nance principles into NextGenerationEU bonds. of the top MBA providers globally. Economy Mark’ in 2021, and in the professional training. This includes UK investors have been keen to past two years companies identi昀椀ed accounting, actuarial, banking and Source allocate to sustainable investment as part of the ‘green economy’ have £210bn investment analysis. funds and more than £210bn was raised £6.2bn through 85 IPOs. Corporate Knights 2023, CFA 2023, CFA UK Several professional bodies have 2023, Chartered Banker Institute 2023, Green invested in UK-domiciled green green bonds issued Finance Institute 2023 recently launched sustainable funds. But many of the most in London
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 8 strengths supporting economic growth Tech and innovation are at the valuation or exit), out of 138 unicorns 1.2 Tech and innovation heart of the City of London’s growth in the UK. This demonstrates £3bn London’s position as a hub for high- plans, with support from industry growth, innovative companies, and and government. invested in UK AI scaleups the City of London alongside UK Tech innovation has the power to government has invested in the policy EU in November 2023. The UK also drive growth and pro昀椀ts across and programmes to support them. The UK is at the cutting edge of 昀椀ntech developments, and a world leader in convened business leaders and top the business landscape. Financial Source government o昀케cials at the AI Safety innovative payments systems, regtech, insurtech and cyber security. It is the leading services is a natural partner: the Summit, where outcomes included industry has a long history of pushing 昀椀ntech centre in Europe – London attracts more 昀椀ntech investment than the next Dealroom 2023, BRES 2023 an agreement to harmonise testing technological boundaries to gain a AI can drive improvements in e昀昀orts before new releases. The UK 13 European cities combined. The UK’s FPS industry helps ambitious new companies competitive edge. Tech jobs in the launched the AI Safety Institute, the ef昀椀ciency and competitiveness for to thrive by providing an established customer base, as well as the 昀椀nancing and City have almost doubled between world’s 昀椀rst government capability British business. 2017 and 2022 and make up 14% of services to succeed. for testing AI models – the US, jobs in the City of London, compared Singapore and EU have since followed £3bn of private capital was invested to 昀椀nancial services and professional with their own versions of the UK’s into UK-based AI scaleups in 2022: services which account for 32% and model and agreed to work together. nearly double the funding compared 28%, respectively. Tech is the fastest- The UK has led this important global to France, Germany, and the rest of growing employment sector in the work stream and other countries Europe combined. The UK is a global City. There are 104 unicorns in the including France and South Korea thought leader on AI development, capital (companies with a US$1bn+ have agreed to host the next AI driving debate and cooperation Tech and innovation score Safety Summits. with other 昀椀nancial centres. The Bletchley Declaration on AI safety Source 104 and security cooperation, led by UK Intellectual Property O昀케ce unicorns in London the UK government, was agreed London New York City Singapore Frankfurt Paris Hong Kong Tokyo and signed by 28 countries and the (UK) (US) (Germany) (France) (Japan) Vision for Economic Growth Big move: Big move: Be internationally competitive on data and digital. Invest in an innovation and growth mindset across Create a di昀昀erentiated approach to data policy government, regulatory agencies, and industry. and regulation that combines high standards with Digital transformations of the next few years will pragmatism. Promote digital veri昀椀cation by scaling require agile responses that cut across existing the deployment of the robust standards government regulatory boundaries. Deploying machine-readable has been developing. Also, consider emulating the regulation, and tasking regulators to do so, would be US’s Electronic Data Gathering, Analysis, and Retrieval another critical change. (EDGAR) system to make it easier for investors to 38 59 38 24 18 25 17 assess information about public companies when making investment decisions.
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 9 strengths supporting economic growth amount of PE and VC investment into The UK government launched The FCA is harnessing 昀椀ntech to The UK is the largest tech ecosystem in Europe 昀椀ntech last year (£61bn). The number ambitious plans to regulate improve regulatory processes cryptocurrency and incorporate of 昀椀ntech investment deals globally and giving UK FS companies a Investment in 昀椀ntech, £bn crypto and distributed peaked in 2021 with 4,355 across competitive edge. our GFCs. There were around 1,000 ledger technology (DLT) into London New York City Singapore Frankfurt Paris Hong Kong Tokyo The FCA is working with the Bank of fewer deals in 2022: the US recorded capital markets. England to reduce the cost of data £80bn most of these (2,142) and the UK was Properly regulated crypto assets collection for FS 昀椀rms. The regulators second with 587. could enhance payments and money Source are harmonising data standards, transfer processes, improving costs updating reporting instructions, and e昀케ciency for consumers. In April and integrating reporting to a more Pitchbook 2023 £70bn 2022, the UK government committed streamlined and e昀케cient data The government is supporting the to launching a regulatory regime collection process. The FCA created need for top tech talent in the UK. for crypto assets and HM Treasury a permanent Digital Sandbox service completed a consultation on their which promotes solutions to complex The UK tech ecosystem is widely regulation in October 2023. That £60bn regulatory challenges like Authorised considered one of the best in the month, the UK government also Push Payment (APP) Fraud, world and this keeps global talent released plans for the regulation greenwashing, and scam detection. 昀氀ocking to innovative UK companies. of 昀椀at-backed cryptocurrencies They are also investing in AI to However, there is a global tech to harness their bene昀椀ts within support supervision work, identify skills gap; High Potential Individual the 昀椀nancial system. Regulating £50bn online scams, and digital intelligence. (HPI) visas were introduced in 2020 crypto assets within the current Source to ensure the UK is able to keep framework allows for associated attracting and retaining the right new technologies, such as DLT, to FCA 2023, Transforming Data Collection 2023 talent. There were 3,000 HPI and be incorporated into established £40bn entrepreneur visas issued in 2022 capital markets operations, such and more than 2,000 issued in the as debt issuance or tokenisation of 昀椀rst half of 2023. The UK government funds. The UK’s leading position in also announced a £118m skills cryptocurrency development has package to develop more homegrown attracted investment companies £30bn from around the world to open talent and attract more skilled people from overseas. o昀케ces in London. Source The UK is Europe’s leading centre £20bn for 昀椀ntech investment and Home O昀케ce 2023 London is one of the world’s top tech ecosystems. Private equity (PE) and venture capital £10bn (VC) 昀椀rms invested £14bn into early stage UK 昀椀ntech companies in 2022, £1bn less than in the year before but £14bn 3,000 three times more than in France, Germany, HK, Japan and Singapore £0 PE and VC investment into HPI and entrepreneur visas combined. The US saw the highest 2017 2018 2019 2020 2021 2022 UK 昀椀ntech last year issued in the UK in 2022
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 10 strengths supporting economic growth London 50 (-2) 2. Reach of 昀椀nancial activity (UK) New York City 60 (-14) (US) The UK is the largest international 昀椀nance hub and plays a key role in facilitating cross- border 昀椀nance around the world. The UK offers global companies a broad spectrum of Singapore 17 (0) 昀椀nancial services, from capital markets to insurance, access to international markets, and a deep pool of the brightest talent. The UK remains the world’s largest centre for Frankfurt 15 (-1) international bond issuance and trading, commercial (re)insurance, foreign exchange (Germany) trading, and the second largest asset management centre. Paris 16 (-2) (France) Hong Kong 17 (-2) Tokyo 10 (0) (Japan) 0 – Least competitive Most competitive – 100 2024 score 2023 score Metrics – Assets under management (AUM) – Value of foreign equity trading – Investment funds – International debt securities, amount outstanding – Net 昀椀nancial services exports – International debt securities, gross issuance – Foreign direct investment (FDI) in 昀椀nancial services – Cross-border bank positions – Number of foreign companies listed – Foreign exchange trading turnover – Number of IPOs by foreign companies – Over-the-counter interest rate derivatives – Value of IPOs by foreign companies trading turnover
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 11 strengths supporting economic growth The UK is the world’s largest net Foreign investment in UK FPS exporter of 昀椀nancial services. reached £2.1bn in 2022 and created 15,000 jobs. Net FS exports reached a record £72bn in 2022, ensuring the UK’s The UK is a top destination for FPS place as the largest net exporter of FDI with a 68% increase in capital FS in the world. The US comes in invested compared to 2021, and second with £59bn of net exports 39% more projects. In the past 昀椀ve in 2022. However, these decreased years, London has been the world’s by 2% year-on-year, as exports fell number one destination for 昀椀nancial by 3% and imports fell by 4%. The services FDI with 779 projects. The US saw net FS exports fall by 13% United States is the largest investor in 2022 as exports fell by 2% and for FS FDI in the UK and investment imports increased by 7%. The UK managers made up a third of FS FDI is a bene昀椀ciary of this trend as UK projects in 2022. FS exports to the US increased by Source 4%. The US continues to be largest market for UK FS exports, accounting fDi Markets 2023 for a 34% share. The UK is the world’s leading Source international asset management hub with £4.2tn managed for UNCTAD 2023 overseas clients. The UK is the second largest asset management centre in the world and the largest in Europe with 13% of global AUM. Globally, AUM dropped 10% in 2022 to £79.5tn. This was Victoria Square In Birmingham City Centre due to negative net sales and fund performance, driven by the changing 0.1% points to 5.4%. The London London is a global insurance hub. macroeconomic landscape. US and Market for specialist insurance is The London Market is the largest European fund AUM fell 13% in this world leading, however. It covers 42% specialist insurance market, and period, whereas UK AUM fell 11%, of global marine, aviation and energy the UK is the third largest insurance from £11.6tn to £10.3tn. This is insurance, and is the market leader in market in the world. the 昀椀rst annual decline in UK AUM direct insurance premiums. Solvency since 2008. The US ranks top in the insurance II reforms will make London’s insurers world with 43.7% market share and more competitive as £100bn of Source over £2.5tn of premium volume in capital is released over the next Investment Association 2023, BCG 2023 2022, driven in part by the size of the ten years. domestic market. The UK is the third Source £72bn £305bn £2bn largest market, by total premium volume (£305bn in 2022). Insurance of net FS exports in the UK of insurance premiums written of FPS FDI into the UK SwissRe Institute 2023, London Market Group 2022 premiums in the UK fell by 2.8% in in 2022 in London in 2022 in 2022 in 2022, and market share dropped
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 12 strengths supporting economic growth The UK is the largest centre for London is the world’s largest centre for international bond issuance international bonds. London New York City Singapore Frankfurt Paris Hong Kong Tokyo The UK is still the largest centre for international bond issuance, but the value of outstanding international $1,200bn bonds in the UK fell 5% in 2022 to US$3.2tn. The US was more than US$800bn behind, in second place. The amount of outstanding international bonds fell across all GFCs in 2022 except Singapore, $1,000bn although still a fraction of the UK market. Gross issuance also fell across all GFCs in 2022 as interest rate hikes took hold. The UK saw a 10% decrease in issuance while other GFCs saw an average fall of 18%. 800bn Overall, the UK retains the highest share of international bond issuance. Source Bank of International Settlements 2023 600bn Vision for Economic Growth 400bn Big move: Big move: Fully implement a programme Maximise the e昀昀ectiveness of of change for UK pension and every pound of government insurance funds. These reforms support for growth companies. 200bn will bene昀椀t long-term savers Government deploys 昀椀nancial while also supporting growth support across the economy, #1 companies, infrastructure, and nationally and locally. Clarifying the wider economy. how these disparate funding the UK is the largest centre for schemes align to major strategic international bond issuance outcomes would provide 0 strong signalling. 2017 2018 2019 2020 2021 2022
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 13 strengths supporting economic growth The UK does more cross-border London remains the world’s London is the top cross-border banking centre in the world banking business than any largest centre for FX and OTC other market. London New York City Singapore Frankfurt Paris Hong Kong Tokyo derivatives trading. The UK is the world’s leading 昀椀nancial The UK uses its advantageous US$6tn centre in terms of cross-border position between Asia and the US to banking activity. It had US$5.3tn of be the world leader in FX trading. In cross-border banking claims (15% 2022 London handled a daily average global market share) and US$5.4tn of US$3.8tn in FX trades, double of cross-border liabilities in Q4 New York (the next largest centre) 2022. Japan ranks second with 12% which saw daily average volumes market share, followed by France US$5tn of US$1.9tn. The UK is the leader in and Germany with 11% and 10%, OTC derivatives trading but saw a respectively. The US ranks fourth with 28% fall in volumes between 2019 9% share. Global cross-border bank and 2022 as 昀椀nancial market activity claims fell by US$1.4tn in Q4 2022: reduced with increasing interest rising interest rates and a decline rates. Singapore’s OTC derivatives in the market value of derivatives US$4tn trading increased 34%, but at far led to a drop in cross-border credit. lower volumes. Derivatives-based This trend continues into 2023, investment products have been and although the UK remains the increasingly popular amongst Asian market leader, absolute volumes are retail investors. in decline. The attractiveness of UK equity Source US$3tn markets is in decline. Bank of International Settlements 2023 The number of foreign companies listed in the UK is dropping. 328 foreign companies listed in 2022, down from 352 in 2021. This is in US$2tn contrast to the US where the number of foreign listings increased to reach 1,452. However, London still saw more foreign listings than other European 昀椀nancial centres: nine international 昀椀rms launched their US$1tn IPO in the UK capital. Across all GFCs, the value of foreign IPOs fell by an average of 68% YoY. London saw a US$3.8tn drop of 87% and NYC 90%. Source daily FX trades handled in London in 2022 US$0 World Federation of Exchanges 2023 2017 2018 2019 2020 2021 2022
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 14 strengths supporting economic growth London 66 (9) (UK) 3. Regulatory environment New York City 41 (3) (US) Businesses in the UK bene昀椀t from a widely respected regulatory regime that protects 75 (-7) consumers and increasingly opens doors for global investment professionals. Singapore UK regulators have taken on a secondary objective to promote growth and keep Frankfurt the UK 昀椀nancial services internationally competitive. The FCA and PRA are ensuring 49 (2) (Germany) that domestic FS companies can leverage the latest technology to drive ef昀椀ciencies and productivity, while regulatory coherence with global partners ensures access to Paris 40 (-1) international markets. (France) Hong Kong 53 (-4) Tokyo 45 (0) (Japan) 0 – Least competitive Most competitive – 100 2024 score 2023 score Metrics – Government e昀昀ectiveness – Preferred seat of arbitration – Regulatory quality – Corporate tax rate – Control of corruption – Individual income tax rate – English Common Law – Size of international tax treaty network – Financial centre = political centre – Additional taxes applicable in FS sector – Regulatory sandbox – Tax complexity – Open banking – Controls of the movement of capital and people – Regulatory coherence / equivalence – Services trade restrictiveness index – Sustainable 昀椀nance taxonomy – Cost of regulatory barriers to FS trade Manchester’s city centre – Most favourable regulatory regime for FS – Business complexity (NEW)
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 15 strengths supporting economic growth The UK regulatory regime is highly respected on the global stage. 3.1 Regulatory stability and innovation Perceptions of a regulator’s, or government’s, ability to formulate and implement e昀昀ective policy is The regulatory regime in the UK is widely admired and considered the most an important factor in attracting international business. The UK favourable for FS companies. It is a major factor in businesses deciding to is perceived to be one of the locate in the UK and supports the UK’s international competitiveness. In the most e昀昀ective and respected regulatory regimes in the world. The City of London’s Vision for Economic Growth we outline the need for a clear international business community’s long-term strategy for FS regulations, given the emphasis companies place on perception of government stability. We also need to introduce new regulation gradually, allowing time for e昀昀ectiveness has turned negative across nearly all 昀椀nancial centres, changes to take effect. Singapore being the only exception. However, perceptions of UK regulatory e昀昀ectiveness turned positive in 2022 for the 昀椀rst time in three years. Regulatory stalemate, left many companies with regulatory implemented, or begun to Supporting a global 昀椀nance hub with due to Brexit and COVID-19, has been fatigue. As more resources are implement, all currently required a sophisticated domestic market. directed toward compliance with Basel Regulatory Framework addressed with new legislation and policy to permit and promote private The UK is home to a wide range of regulatory changes, costs and standards and they are broadly sector development. A survey of FS companies servicing domestic competition for quali昀椀ed sta昀昀 aligned with US and EU banks. business leaders by the IMD Business consumers and international have increased. School shows the UK saw the The UK has also signed several business. This presents a unique greatest improvement in regulatory Regulators have improved their trade and regulatory cooperation challenge for regulators who aim to perception in 2022. e昀케ciency and e昀昀ectiveness through agreements to ease cross-border protect consumers of domestic FS technology and increasing sta昀昀 business. Memorandums of products, without blocking global Source levels. UK regulators are supportive understanding or free trade 昀椀nance 昀椀rms from international IMD 2023 of innovation in capital markets and agreements (FTA) have been signed capital markets. The UK government were the 昀椀rst to introduce sandboxes with the US, EU, Australia, CPTTP, has tried to address this through London’s Commercial Courts to test 昀椀ntech advancements. India, and Saudi Arabia, to allow the Financial Services and Markets remain a preferred destination for Plantation Lane, City of London Sandboxes streamline the UK 昀椀rms to access those markets. Act 2023, while recognising the role international dispute resolution. introduction of new tech into markets There are ongoing negotiations with that regulation plays in safeguarding Most insurance, derivatives and home of English law, and companies and operational processes. Switzerland, Canada, Australia and international competitiveness. commodities trading contracts based here have access to its top English law provides the legal basis Mexico, as part of FTA negotiations. Regulators have been tasked globally are written in English law, practitioners. Companies based in for many international jurisdictions, International trade and alignment on with ensuring requirements are covering trillions of pounds of the UK also bene昀椀t from formation, standards open routes to growth for Source comprising an estimated 40% of all proportionate in speed and cost and 昀椀nancial transactions each year. restructuring and insolvency laws, UK companies. governing law in global corporate Basel Regulatory Framework Adoption 2023 appropriate to the customer type. English law supports business and UK regulations. arbitration. 77% of UK Commercial They should also be transparent, ambitions, it is visionary and Court claims in 2019 involved at least The UK is aligned with international Source to help markets work better and progressive, and it has the support one party outside England and Wales 昀椀nance standards to ensure improve UK competitiveness. of a robust court, arbitration and and 43% of claims involved parties all interoperability across multiple LegalUK 2023 However, 昀椀nding this balance has disputes infrastructure. London is the located outside England and Wales. markets. UK banks have either
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 16 strengths supporting economic growth 3.2 Tax High tax rates in the UK negatively affect its international competitiveness. Companies may be dissuaded from opening of昀椀ces because of high corporate tax rates, and international talent may prefer to relocate to countries with lower taxes. Singapore and 25% 45.5% 154 Hong Kong have the most competitive tax bases but operate different economic models. Firms and individuals in the UK bene昀椀t from the largest double taxation treaty network. corporate tax in the UK tax rate paid by Double tax treaties between the UK London banks in 2023 and countires around the world mid-level complexity in comparison Corporate and personal tax rates in Double tax treaties fuel cross-border to other GFCs. the UK are comparatively high. business activity. Source Tax is an important consideration Double tax treaties (DTTs) bene昀椀t for both companies and workers businesses and individuals as they PWC 2023, KPMG 2023, EY 2023 deciding on a location. At 25%, the allow a single instance of pro昀椀ts The UK will soon be the only GFC to UK and France have the highest or income to be taxed. Businesses levy additional taxes on 昀椀nancial corporate tax rate across our GFCs. located in countries with a high services companies. However, France recently reduced its number of DTTs can access more tax rate from 27.5%, whereas the UK’s markets but only pay tax at home. The UK, France and Germany all levy increased from 19%, leapfrogging the Similarly, employees can work additional taxes on FS companies. US with a corporate tax rate of 21%. across borders without being The US, Singapore, Hong Kong and Germany has the lowest corporate taxed in two places. The UK has the Japan do not. UK banks also pay tax rate at 15.8%. highest number of DTTs amongst the highest rate of tax amongst GFCs: 154 treaties with countries 昀椀nancial centres and have seen an For personal tax, Hong Kong and around the world. Hong Kong and increase in corporation tax, as well Singapore are outliers with far lower the US have the fewest with 56 and as the bank levy and bank surcharge. rates than other GFCs (17% and 22% 68, respectively. This helps bring Banks in London paid a 45.5% tax respectively). The UK’s highest rate is international talent to the UK and rate in 2023, higher than New York 45%, shared by France, Germany and allows UK citizens to work in more (27.9%) but lower than Frankfurt Japan. Despite the US having lower countries without being penalised by (46.8%). Although European banks tax rates in general, NYC has a top double taxation. are currently paying similar tax earner rate of 37%, levied on earnings Source rates as UK banks, this is expected greater than $693,751. In contrast, the to decrease as the EU winds up the UK’s top rate is applied on earnings UK Finance 2023 European Single Resolution Fund. above £125,140. Although the US This would leave the UK as the only generally has lower taxes, its tax major 昀椀nancial centre with sector- system is considered one of the most speci昀椀c taxes. complex in the world. The UK has a Edinburgh city centre
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 17 strengths supporting economic growth legal and regulatory uncertainty a昀昀ecting global decision-makers 3.3 Market access post-Brexit. The UK has stringent checks in place to combat fraud and money laundering which, while they slow down some international The UK remains one of the most open and global 昀椀nancial centres with fewer business operations, provide critical restrictions on companies than those based in the US, France, or Japan. It’s considered peace of mind and risk mitigation. one of the least complex jurisdictions to operate from. However, future growth is Source dependent on international trade opportunities: trade agreements and alignment of TMF Group 2023 standards are key in retaining the UK’s position as an international 昀椀nance hub. The UK is the least restrictive GFC for movement of capital and people. The international 昀椀nance industry is built on liquidity; without movement The UK is one of the most business- of capital and people trade is friendly markets in the world. strangled. The annual Economic The UK has one of the least complex Freedom of the World report business environments in the world describes the UK as a centre that with Netherlands and Hong Kong is open for international business. the only large economies considered Based on an assessment of the easier places to open a business. country’s restrictions on foreign New businesses can easily set up ownership and investment, capital here and bene昀椀t from a business- controls, and the freedom of friendly ecosystem compared to foreigners to visit for short-term other GFCs; the UK ranks second business purposes, the UK is more behind Hong Kong, the US ranks open than all other GFCs. The UK’s 11th, and Singapore 20th. France is openness dropped in the wake of Vision for Economic Growth ranked as the most complex market Brexit as the movement of people in the world to set up and run a was restricted, but this has now business due to its in昀氀exible working been recti昀椀ed. Big move: Big move: practices, strict employment laws and Source Showcase the UK’s FPS 昀椀rms Create innovative networks complexity arising from fast adoption like never before through the across the world. The UK should of international legislation. Fraser Institute 2023 creation of an FPS Knowledge and 昀氀ip its trade policy to focus on The UK improved its ranking in 2023 Support Hub. The international services, as much as goods. as new legislation and a more stable promotion of the UK’s 昀椀nancial Trade negotiators should use government helped to temper the industry relies on a network of the full “trade toolbox” including promotion agencies at home and digital and, where appropriate, #2 abroad. With targeted support, mutual recognition agreements these organisations could have of professional quali昀椀cations or The UK is the second far stronger impact. regulatory frameworks. most business-friendly George Best Belfast City Airport global 昀椀nancial centre
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 18 strengths supporting economic growth London 63 (3) (UK) 4. Access to talent and skills New York City 61 (-2) (US) Businesses in London and the UK can draw from a deep pool of highly-skilled workers 62 (-3) at home and abroad. The FPS industry employs 2.4m people in the UK, 317,000 of whom Singapore are based in the City of London. Over 40% of employees in London’s FS industry are Frankfurt from overseas. The quality of life in the capital attracts people from around the world, 56 (2) (Germany) and the UK government has revitalised the visa system to ensure continued access to the best global talent. London’s workforce is also the most skilled and productive in Paris 48 (-1) the UK, fed by world-leading universities and MBA programmes. (France) Hong Kong 37 (-7) Tokyo 24 (-5) (Japan) 0 – Least competitive Most competitive – 100 2024 score 2023 score Metrics – Employee training – Visa access (NEW) – Gender gap (NEW) – Fluent English – Diversity – Ease of hiring foreign labour – Relevant graduates – Foreign-born population – Top-level business schools – Inbound internationally mobile students – The Times Higher Education World University Rankings – Cost of living – Math/science skills attainment – Cultural interaction – Digital skills among active population – Air quality – Skilled labour – Happiness – Productivity – Green spaces – Visa costs – Pension quality (NEW)
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 19 strengths supporting economic growth post-retirement. Pensioners in the The share of FPS-relevant graduates UK bene昀椀t from a state pension in the UK peaked in 2019, with 42% 4.1 Skills, hiring and training as well as their own personal graduating with related degrees. pension schemes. All UK companies The share fell to 38% in 2021. France, contribute a minimum of 8% of an with a similar number of students employee’s salary to a pension, in tertiary education, increased the The FS industry generates an average contribution to economic output of £177k per unless the employee opts out. share of FPS-quali昀椀ed graduates to Source 48% in 2021. However, in absolute employee, making it is one of the most productive in the UK. This productivity is due terms this means that there are over 1m FPS-relevant students in the UK. in part to the calibre of UK universities, MBA courses and professional quali昀椀cations Mercer/CFA 2023 Although the share of students fell, programmes, which are some of the world’s best. However, in-job training and re- There are over one million UK the absolute number increased by >1m students studying for FPS-related skilling needs to be improved. UK FS has a history of ‘buying in’ skills rather than 14,000 from 2019 to 2021 in line with related degrees. student population. retraining employees, but with low unemployment and an acute digital skills gap, this FPS-relevant students in the UK Source has become more expensive to do. There are 2.8m undergraduate and postgraduate students in the UK. UNESCO 2023, HESA 2023 level fell across all 昀椀nancial centres The UK strives for gender equality in 2022. The UK has the highest and is one of the highest-ranked The UK has the highest share of senior women in 昀椀nance proportion of female executives countries in the world in this regard, working in 昀椀nancial services amongst but there is more to be done. % of women in senior FS positions GFCs, but at 27% this is lower than Compared to other countries, the UK other industries in the UK. London New York City Singapore Frankfurt Paris Hong Kong Tokyo ranks highly for gender equality, but Source has far to go. The WEF Global Gender 40 Report 2023 ranks the UK 昀椀fteenth WEF 2023, FTSE Women Leaders 2023, Re昀椀nitiv 2023 in the world for gender parity. In comparison to other 昀椀nancial centres, The UK has one of the best pension the UK is second, behind Germany. 30 systems in the world. The UK has a higher proportion of female graduates from tertiary UK pensions rank second amongst education, and a higher proportion GFCs and tenth in the world in terms of female graduates in FPS-relevant of bene昀椀ts provided to pensioners, 20 subjects: natural sciences, business quality of regulation and meeting administration and law. demographic challenges. Singapore is the only GFC that ranks higher than FTSE Women Leaders research the UK; its smaller population allows shows that women make up 40% of 10 it to provide greater state pension FTSE 350 company board members. bene昀椀ts than other countries. However, the percentage is lower within the 昀椀nance sector. Female Good pensions bene昀椀t workers as representation on 昀椀nancial services 0 they increase total compensation company boards and at executive 2017 2018 2019 2020 2021 2022 and contribute to quality of life
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 20 strengths supporting economic growth FPS companies need better digital Employee training is perceived Financial services is a key driver of skills in the workforce which must to be a lower priority in the UK growth in the UK. be addressed through training than in other GFCs, creating FS is one of the most productive and re-skilling. employee churn. industries in the UK. In 2022, it The digital skills gap is a global The UK does not prioritise employee produced £278bn of economic output problem that countries are training and, despite improving in – 12% of the UK’s economic output competing to solve. The UK is lagging 2022, the UK is lowest-ranked among and £177k per worker. London is the in digital skills and ranks behind GFCs for attitudes towards employee most productive area of the UK, with Singapore, the US, and Hong Kong. training according to a survey of productivity measured as ‘output The FPS industry has a particularly business leaders. Employers in the per job’. This is 40% higher than the high demand for digital skills: one in UK are more likely to view training UK average, but the UK ranks behind eight roles is now tech-reliant, twice and re-skilling as time taken away the US and Singapore in terms of as high as the wider UK economy. UK from an employee’s role. The culture productivity per worker. employers have a history of buying around training in the UK must be Source in skills, hiring new people rather addressed, as skills gaps continue to than re-skilling current employees. appear. The ‘redundancy and re-hire’ ONS 2023, ILO 2023 However, a tight labour market, approach observed across the FS particularly with global demand industry is costly and diminishes for digital skills, makes buying in international competitiveness. skills more expensive and does not Working practices in other 昀椀nancial address underlying gaps. Analysis centres see employees moved from the Financial Services Skills into growth areas at the same Commission shows that re-skilling company. Internal mobility instils and training could boost economic longevity of employment, retains output by £550m a year. company culture, and keeps valuable experience within the company. The UK ranks behind Singapore Source and the US in availability of skilled labour, however, this measure is IMD 2023 based on the total economy rather than the FPS industry. City of London Corporation engagement with the University of Leeds FPS industry indicates that a high amount of skilled labour is available in London. However, more can be only to Singapore in university quality. earning potential, however, and US The UK has one of the most highly- done to improve the wider UK labour respected education systems in the However, the UK has ten universities salaries are higher than in the UK. force through re-skilling. in the Times Higher Education top London Business School is ranked world and is home to the world’s 100 and 163 universities in total, eighth globally. Source top universities. whereas Singapore only has two. Source UK universities are ranked amongst IMD 2023, FSSC 2023 £550m £278bn The US has the highest-rated the best in the world, with Oxford Times Higher Education 2023, FT Global MBA business schools, taking eight of the Ranking 2023 annual increase to economic output of economic output from the University ranked top in 2023 for top ten places in the FT Global MBA by closing the UK FS skills gap FS industry the eighth year running. Among top Ranking. The FT ranking is based on 昀椀nancial centres the UK is second
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 21 strengths supporting economic growth 4.2 International talent An international 昀椀nance hub needs an international workforce. London attracts top talent from around the world - 41% of workers in London were born abroad. This diversity ushers in global knowledge, language skills and cultural in昀氀uence. The UK visa system is one of the most open for skilled workers, and its universities attract the brightest minds from around the world. market. However, the City of London The City of London has a highly UK work visas are expensive, but in has the most diverse international high demand and the UK has fewer international workforce, but the UK workforce amongst 昀椀nancial centres, is less attractive to foreign workers restrictions on skilled immigrants. than the US. with 41% of workers born overseas. The UK is the most open market Our engagement with industry 昀椀nds The UK continues to rank behind for international talent among that London is still highly attractive to the US, Singapore and Germany in 昀椀nancial centres. Other visas may be foreign FPS workers. its ability to attract highly-skilled cheaper, but have more restrictive Source foreign talent. Reasons for this are barriers, such as labour market high visa costs, high cost of living and testing, language skills tests or long IMD 2023 availability of jobs in a tight labour processing times. UK and US working visas are among the most expensive in the world. A three-year skilled worker visa for someone entering the US or UK cost around £7,500 in 2023. This is a signi昀椀cant barrier to the movement of skilled workers across borders and hampers our ability to attract talent. In comparison, a three-year skilled worker visa for international students across a larger to the UK. Non-EU international The number of international France or Germany costs £283 and student population. The number students make up 36% of business students continues to increase, but £155, respectively. Singapore has the where they come from has changed. of international students from the management courses and 30% most expensive visas of Asian GFCs EU has decreased since Brexit, of technology, computing, and at £217, whereas for Hong Kong and The number of international students particularly from Germany and mathematical sciences degrees. The UK has the least Japan a work visa costs just £25 and in the UK has increased annually restrictive visa programme Ireland, as EU students must now pay £17, respectively. 41% Source since data has been available amongst GFCs full international student fees. China, Source and reached 680,000 in 2022. India, and Nigeria are now the largest of City of London HESA 2023, OpenDoors 2023, Study in Japan 2023, Erudera 2023 The US has the largest number of workers born overseas sources of international students Fragomen 2023
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 22 strengths supporting economic growth 4.3 Quality of life Districts, the programme will work third most expensive 昀椀nancial centre London has the best cultural offering to drive domestic and international to live in, after NYC and Singapore, in the world, and the City of London footfall and support SMEs through and ahead of Hong Kong. The rising wants to make it even better. increased spend. cost of housing is responsible for a lot London is a global creative hub as Source of this pressure. It has increased for well as a global 昀椀nancial centre. both homeowners (through higher London has the best cultural mortgage rates) and renters. The Mori Memorial Foundation 2023, Destination City 2023 o昀昀ering in the world, making it a cost of renting in London increased more attractive place to live for 10% in 2023, following a 20% increase UK cost of living continues to rise, 昀椀nancial services workers. London in 2022. This makes hiring younger making working in London harder for has more foreign visitors than other employees and encouraging them young people. 昀椀nancial centres, o昀昀ers a broad into the o昀케ce more challenging, range of theatres, concert halls, and and so salaries and bene昀椀ts have Rampant in昀氀ation and higher interest museums, as well as a wide spectrum increased accordingly. rates have increased the cost of living of dining and shopping options. around the world, making living in Source cities harder for FPS workers. The Destination City is the City of London Numbeo 2023, OpenRent 2023 cost of living in London increased Corporation’s programme to reinvent signi昀椀cantly in 2022. It is now the the Square Mile as a leading leisure destination for workers, residents and visitors to enjoy. In 2023 the City of London’s 昀椀rst leisure brand was launched, with a new website and digital channels dedicated to showcasing the City’s cultural and leisure o昀昀er to new and existing “London has the best cultural o昀昀ering audiences. A new Destination Insights programme will help in the world, making it a more inform developer decisions, the operating plans of occupiers, and attractive place to live for 昀椀nancial measure the impact of the leisure economy – by understanding who services workers.” comes to the City and why. Working closely with landlords, managing agents and Business Improvement RESURGAM by BANDALOOP. Bartholomew Fair 2023. Credit PA/Doug Peters.
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 23 strengths supporting economic growth 5. Resilient business infrastructure Good business infrastructure drives success. High quality of昀椀ces, well-connected transport links and reliable technology are essentials for global business. The rise in hybrid working has brought 昀氀exibility to people’s work-life balance, but the of昀椀ce remains an important part of business life. London 61 (-2) (UK) New York City 56 (-2) (US) Singapore 64 (1) Frankfurt 59 (-5) (Germany) Paris 57 (-2) (France) Hong Kong 38 (-3) Tokyo 49 (-6) (Japan) 0 – Least competitive Most competitive – 100 2024 score 2023 score Cardi昀昀 Bay
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 24 strengths supporting economic growth 5.1 Global business connectivity Despite the development and widespread use of video calling, meeting and working together in person is still a fundamental component of business life. International, domestic and intra-city transport networks are essential in ensuring people can work, meet, network and socialise. London airports have the highest Ef昀椀cient commuting has become an London’s construction boom has capacity and are a hub for important factor in the ‘return to caused higher congestion in its tight international transfers. work’ debate. street network. Air passenger numbers remain High quality infrastructure improves London was the most congested city below 2019 across all GFCs except productivity and quality of life. in the world in 2022 as construction for Tokyo which has seen a 20% Singapore is a leader in infrastructure and redevelopment caused road increase. Passenger numbers in quality, however, it is smaller and closures and lane restrictions. London, NYC, Paris and Frankfurt therefore needs less long-distance London drivers spend an average decreased between 10%-20%, but infrastructure than other GFCs. of 13.5 days in rush hour tra昀케c Singapore passenger numbers are People’s perception of their country’s each year, 5.8 days longer than the still down 50% compared to 2019. infrastructure worsened across all of optimum journey time. The average London saw the highest number of the GFC countries in 2022 except the morning and evening rush hour air passengers in 2022, increasing US which improved, but remains the speed is 14km/h in London and rush 257% from 2021 to 134m. However, lowest rated. hour journeys take almost twice this is still around 30,000 below 2019 There are around nine million as long as the optimum journey. passenger numbers. However, London’s strong transport journeys on London’s transport Source network and miles of cycling lanes network every day. London’s newest o昀昀er multiple transport routes. underground train, the Elizabeth Line Airports annual reports and statistics releases Source (opened in May 2022) is already the UK’s busiest train line, with more than TomTom Tra昀케c Index 2023 600,000 passengers daily. 134m Sources people travelled Global Infrastructure Investment Association 2023 and TFL 2023 through London’s airports in 2022
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 25 strengths supporting economic growth 5.2 Of昀椀ces and working trends Increased hybrid working is one of the few trends from the COVID-19 pandemic that has stuck with us. Working from home and hybrid working remain popular with many employees. However, questions remain over the most productive way of working, and whether hybrid working makes training and development more challenging. London’s of昀椀ces are being re昀椀tted to be more environmentally-friendly and to attract people back in. Younger workers in particular are drawn to of昀椀ces with a cultural and social offering. Newer buildings that offer better facilities, amenities and working conditions also have lower vacancy rates. London has a low of昀椀ce vacancy rate, Of昀椀ce space in London has become Nine of the largest companies in the London has low of昀椀ce vacancies as workers return but this varies across the city with cheaper and is half the price of world are headquartered in London. the West End and The City attracting New York. % of vacant o昀케ce space more companies than Canary Wharf. There were 81 Global 500 companies O昀케ce leasing costs fell across all headquartered across all GFCs in London’s o昀케ce vacancy rates have GFCs except Paris in 2022. The cost 2022, down from 96 in 2021 and 100 decreased since the pandemic to of London o昀케ce space dropped 11%, in 2016. This shows that the largest 2022 7.3 22.2 11.3 9 2.4 14.7 6.5 7.3% in 2022, indicating a healthier to US$101/sqft/year. O昀케ce space in companies in the world are drifting corporate ecosystem and willingness New York fell by 16% but, despite far away from global 昀椀nancial centres. to return to the o昀케ce. Conversely, lower occupancy rates, is still more The exception to this is Japan; there NYC o昀케ce vacancies have increased than double the cost of London at are 41 Japanese companies in the annually since 2020 to reach 22.2% US$220/sqft/year. Paris remains the Fortune Global 500, 29 of which in 2022. Higher o昀케ce vacancy rates cheapest GFC for rented o昀케ce space, are headquartered in Tokyo. New not only lessen the e昀昀ectiveness 2021 7.9 20.4 12.8 8.1 3.1 10.4 6.3 at US$48/sqft/year. York has 16 Global 500 company of the professional ecosystem but Source headquarters, 11 of which are FS reduce the attractiveness of a city companies. London has nine Global to new businesses and lead to fewer 500 company headquarters, but only Jones Lang LaSalle 2023 amenities and services. two of these are 昀椀nancial services Source companies. London is, however, 2020 7.8 15.2 11.8 7.6 3.8 9.4 4.5 the location of many global 昀椀rm’s Savills 2023, Colliers CRE 2023, Cushman largest o昀케ces. & Wake昀椀eld 2023, Statista 2023 Source Fortune 2023 London New York City Singapore Frankfurt Paris Hong Kong Tokyo
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 26 strengths supporting economic growth 5.3 Digital and cyber “Demand for data has increased Whether it’s needed for securities trading in milliseconds or reliable video calls, data across nearly all industries, but is the world’s most in-demand commodity. Businesses rely on fast connections and particularly in 昀椀nancial services. ” broad data streams. The UK is a leader in 昀椀ntech, AI and digital 昀椀nance, but London’s digital infrastructure needs to improve in line with increasing demand. London has the slowest 昀椀xed line Cyber security remains a high People in the UK have the highest and mobile internet speeds across priority to combat the risk of level of internet freedom. all GFCs. online fraud. Internet freedom is an important London has the slowest broadband All the GFCs in our analysis have factor when a tech company decides across all GFCs; average speeds in strong cyber security networks, with where to locate its headquarters. New York, Hong Kong and Singapore the UK ranking third behind the US There is little point in setting up shop are more than twice as fast as the and Singapore. Cyber security is a in a country that would not allow UK. The UK also has the slowest growing risk, and the UK insurance your product to be used. The UK has mobile internet speeds amongst industry is leading the way in the highest internet freedom among GFCs. Demand for data has increased insuring those risks, which improves GFCs: it blocks the least amount of across nearly all industries, but security networks. Companies content and does not infringe on particularly in 昀椀nancial services. must meet minimum cyber security consumer rights. Linked to this is Apps and programmes use higher levels in order to take out cyber control of corruption and the UK levels of data to run smoothly, insurance policies. This has driven is strong in this area. It ranks high and the UK needs to provide up the level of security at companies above the US, but below Singapore su昀케cient data e昀케ciencies. The UK that are prone to attacks and and Germany. government launched the National therefore improved cyber security Source Data Strategy to address future for everyone. needs, this is a key aspect of the UK Source Freedom House 2023 remaining competitive. Source CoLC analysis of EIU data CoLC analysis of multiple providers
1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 27 strengths supporting economic growth Methodology This City of London Corporation ‘Our global offer to business’ benchmarking research assesses the competitiveness of major 昀椀nancial centres. The centres have been chosen based business complexity, visa processing score of 0. All other data points are on their rankings in other major and gender gap. This results in the scored relative to the maximum and indices, such as the WEF Global analysis using 101 metrics in total. minimum values. Competitiveness Report and Z/Yen’s Data is collected at a national and The mean of all metrics scores in Global Financial Centres Index, as each of the 昀椀ve competitiveness city level, depending on availability. well as their overall international Where metrics are at city level – such dimensions constitutes a GFC’s score 昀椀nancial activity. as ‘cost of living’ – data has been in this dimension. Where data is Where the report refers to ‘global collected for each market’s main unavailable for a centre, the mean 昀椀nancial centres’ or ‘GFCs’, it refers 昀椀nancial centre. has been adjusted accordingly. to the following centres: London Where possible, the data collected A centre’s overall score is produced (UK), New York City (US), Singapore, covers the 昀椀ve-year period between by calculating the mean of the Hong Kong, Tokyo (Japan), Frankfurt 2018 and 2022. Where 2023 data is centre’s 昀椀ve dimensional scores, (Germany) and Paris (France). available the 昀椀ve-year period used is with each dimension having an equal The benchmarking model is based on 2019-2023. The data is normalised to weighting of 20%. analysis of 98 unique metrics across make relative comparisons between The relative year-on-year 昀椀ve key competitiveness dimensions. di昀昀erent types of data (values, competitiveness score change has Three of these metrics are used to ratings, index scores, percentages) been calculated using revised 昀椀gures support the assessment in more than possible. The most competitive data and updated metrics, therefore it one competitiveness dimension. For point between 2018 and 2022 across is not directly comparable with the example, ‘digital skills’ are relevant all centres – for example, the largest competitiveness scores published in in both ‘innovative ecosystem’ and amount of assets under management the City of London Corporation’s 2023 ‘access to talent and skills’. We have – is assigned a score of 100. The least ‘Our global o昀昀er to business’ report. added several new metrics including; competitive data point is assigned a To discuss this report, contact: Alastair Wainwright Economic.Research@cityo昀氀ondon.gov.uk
About the Global City About the City of campaign London Corporation The Global City campaign is the City of London The City of London Corporation is the governing body Corporation’s overarching initiative to promote the of the Square Mile dedicated to a vibrant and thriving UK as a world-leading international 昀椀nancial centre. City, supporting a diverse and sustainable London It showcases the UK as a great place for 昀椀nancial and within a globally successful UK. professional services 昀椀rms to invest, locate and grow. We aim to: theglobalcity.uk – Contribute to a 昀氀ourishing society – Support a thriving economy – Shape outstanding environments By strengthening the connections, capacity and character of the City, London and the UK for the bene昀椀t of people who live, work and visit here. cityo昀氀ondon.gov.uk