There are calls for radical and rapid change in the UK’s regulatory and legal systems to ensure that the country retains its place in the global financial services industry.

TheCityUK and PwC UK have published a landmark report setting out the actions needed for the UK to lead in the next era of global finance.

The report, ‘No time to lose: Reasserting UK leadership in financial and related professional services’, is based engagement with over 300 senior leaders across industry, government, regulators, and academia – and underpinned by new economic modelling and international benchmarking from PwC.

The report said those interviewed were clear: while the increased focus from government and regulators on growth is welcome, bolder ambition and faster, more decisive action to reform the financial system and reinforce the UK’s global reputation for legal certainty is needed.

Without this, the UK risks ceding unrecoverable ground to competitor financial centres who are investing heavily in digital market infrastructure, accelerating regulatory and tax reform, and using targeted incentives to attract capital, talent, and innovation.

“The impact of moving slowly is already being felt,” the report added. “While insurance and professional services are outperforming, overall industry growth has flatlined over the past decade, with real growth averaging just 0.1% a year since 2014 and productivity falling sharply.”

New PwC economic modelling suggests that, on current trends, the industry could grow at only 0.5% a year in real terms through to 2035, steadily eroding the industry’s share of the UK economy and limiting its capacity to support households and businesses through lending, insurance and investment services.

But the upside from acting decisively is substantial, with PwC modelling showing that the UK could unlock over £53 billion in additional annual economic output and £22 billion in additional annual tax receipts by 2035 – c.£770 per household. The benefits would also be felt across the wider economy, with the UK having direct access to scarce global skills, specialist expertise, and deep pools of capital to support national priorities such as infrastructure, defence, energy security, and high-growth businesses.

Anne Richards DBE, chair of Project Steering Committee and chair of TheCityUK Leadership Council, said: “The UK’s financial and related professional services industry is a strategic national asset that cannot be taken for granted. While professional services and insurance are outperforming, the industry’s growth overall has flatlined. We are at a critical juncture. The message from industry leaders and stakeholders is clear: build on the positive approach in place to reform the system, but do it faster, with greater ambition and with targeted execution.

“It has never been more urgent for industry, government, and regulators to act together to unlock growth and drive innovation. This is an industry that delivers value right across the economy and society. If successful, the UK will become more competitive and appealing for investment, businesses, and talent, benefitting people nationwide.”

Darren Ketteringham, UK Financial Services Leader, PwC UK, added: “Our financial and related professional services industry is built on qualities others strive to emulate deep expertise, openness, and a relentless ability to reinvent. It is more than an industry in its own right; it is a multiplier of opportunity that fuels growth across the whole country. But our modelling is unequivocal. Without substantive action, the UK’s financial services industry will shrink as a proportion of national output.

“Other financial centres are closing the gap with the UK and technology has reset the terms of competition. Industry leaders are clear. We must make bold decisions now on how we harness technology before others who are moving with greater ambition and speed to lock in a competitive advantage. Adopting AI, leading on tokenisation, and building the market plumbing to underpin this will be critical to securing the UK’s position as a leading financial centre for decades to come.

“Staying ahead requires constant transformation and this is a make or break moment. With shared clarity and confidence in the path forward, we can unlock the £53 billion economic opportunity and put the UK decisively back at the frontier of global financial services.”