London launches scheme to salvage global financial services leadership

Leaders of some of London’s biggest financial services companies will combine in a new initiative which will seek to identify the risks posed to its place as the world’s leading global financial services centre.

Senior figures from organisations including Lloyd’s, Schroders, JP Morgan, EY, KPMG, Barclays, Glasswall and CIPL will combine to examine opportunities for the UK’s financial and professional services sector, as well as identify areas of risk ahead.

The City of London Corporation has launched the new joint initiative, Finance For Growth, spearheaded by a steering board of influential figures and supported by Oliver Wyman. It will draw on “robust evidence, insight and research to examine how the sector can remain best in class internationally and stimulate growth in the UK economy for the remainder of the decade and beyond,” the corporation explained.

The financial and professional services industry is a key driver of the UK’s economy, generating over £278 billion in economic output, or 12% of the entire economic output of the UK in 2022.

However, UK’s financial and professional services sector has come under increased pressure following the recent twin shocks of COVID and the war in Ukraine, as well as grappling with the rise in protectionism around the world, and the UK’s changing relationship with the EU.

The initiative will focus on four fundamental areas – tech and innovation, sustainable finance, competitive marketplace and international trade – and the group will deliver ambitious, actionable recommendations for the competitiveness of UK financial services in Q3 2023.

Lord Mayor, Nicholas Lyons, said: “Our financial and professional services sector is the engine of our economy – but it needs a kickstart. While the Government’s Edinburgh Reforms, and the Financial Services and Markets Bill, are welcome, the sector needs long-term strategic direction to reinforce its global position and keep delivering for the whole of the UK’s economy. With leading figures on board, Finance for Growth will help shape thinking and catalyse reform for years to come.”

The City of London Corporation, Policy Chairman, Chris Hayward added the threat from London rivals was increasing.

“Our global competitors are constantly snapping at our heels for the UK’s financial services crown,” he explained. “The sector is in urgent need of a blueprint for how the UK can remain competitive for the next decade and beyond. The City of London Corporation is well placed to convene all parties across government, our regulators and industry on this critical agenda.

“Through our network of financial services partners in trade associations and other bodies we will mobilise efforts and ensure we build a robust case for further reform – so that UK financial services can continue to deliver prosperity to business and communities in cities and regions right across the country.”

He added more than 2.3 million people work in UK financial and professional services , with two thirds of jobs outside of London. Any shift in the UK’s dominant position will have a considerable impact on consumers, savers, businesses, jobs and ultimately, the total tax revenue contributed by the industry to the Government.

Kay Swinburne, Vice Chair Financial Services, KPMG, said: “The UK needs to show that it can compete on the global stage and collaborate with peer centres overseas, with regulatory policies and a fiscal environment that keep us open to business and international talent. This is critical to reinforce and revitalise its position as a global financial and professional services hub and to support growth across the wider economy.”

Katharine Braddick, Group Head of Strategic Policy, Barclays, warned: “Recent geopolitical shocks and the shared challenge of climate change remind us that the world’s economies are interconnected. The UK can play a leading role here, in setting international standards, and as the global voice for regulatory coherence, building on our existing strong commitment to openness, to help to achieve wide economic prosperity, stability and growth.”

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