UK extends its lead as the largest financial centre in Europe but rivals in Asia are catching up fast
Britain is the largest financial centre in Europe and has an even bigger lead over its rivals than previous rankings have suggested, according to new research.
The financial sector is roughly three times the size of its nearest European rivals, France and Germany, data from think tank New Financial showed, and is second only to the US globally.
The UK has a score of 35 out of 100 when judged on 42 metrics of domestic and international activity, focusing on the value of business it commands.
Trading centre: Britain’s financial sector is roughly three times the size of its nearest European rivals, France and Germany, the latest data from think tank New Financial showed
The US scores 84, while France and Germany score 13 and 12 respectively. But China, Japan and Hong Kong are all creeping up on the UK, with scores of 29, 19 and 14 respectively.
Domestic activity has stagnated since the Brexit vote in 2016, and while international activity has grown faster in the UK than the EU, Hong Kong and Singapore have been stealing market share.
New Financial analyst Panagiotis Asimakopoulos said Brexit will have dented the UK lead in foreign equity trading, foreign bank assets, trading of complex financial assets known as derivatives and clearing, where money is transferred from buyer to seller.
But he said: ‘Even if 10 per cent to 20 per cent of the UK’s international activity were to relocate – a very big ‘if’ – the UK would still be more than double their size.
However, four of the top 10 financial centres are countries in Asia that have been catching up rapidly.’
It comes as Chancellor Rishi Sunak is trying to exclude the City of London’s financial services companies from a global tax overhaul targeting the world’s most profitable businesses.
He fears British banks will join the likes of Google and Amazon in having to redistribute profits. The EU has pushed back – it expects all companies to pay their fair share.