UK has 37% share of record global foreign exchange turnover

While further recovery in the volume of financial sector business in Q4 was reported across the UK, trends in wholesale financial markets were weak with most indicators down. Our quarterly City Indicators Bulletin shows that only two indicators were up between Q3 and Q4, with 10 down and one flat. The trend on an annual comparison presents much the same picture with three indicators up, nine down and one flat in the 12 months to Q4 2011.

The only other indicator to rise between the third and fourth quarters was occupancy of offices in the City of London. In wholesale financial markets, IPOs and mergers and acquisition in Europe were down as was trading of UK equities and derivatives trading at NYSE Liffe. Central London indicators were generally down with job vacancies and annual take up of office space falling. Also down were FSA authorisations of firms and UK bank lending to non-financial businesses. Prime rents in the City of London were stable for the fifth quarter in succession.

Focusing on the foreign exchange figures, daily global foreign exchange trading increased by 14% in the year to October 2011 to a record $4.7 trillion per day according to TheCityUK estimates based on invidual central banks’ six-monthly surveys. The UK was the leading centre with 37% of global activity, its share up from 36% a year earlier, but down from 38% in April 2011. New York increased its share of trading from 18% to 20% in the year to October 2011. The next largest centres were Tokyo and Singapore with around 5.5% each.

Around twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined.

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