It’s possible to measure the ‘ripple effect’ that an industry like financial and related professional services has on the wider economy
One of our most recent economic research reports, the 2025 edition of our flagship Key Facts about UK‑based financial and related professional services, highlights the fundamental role that financial and related professional services play across the UK economy. Our annual research sets out the various ways the industry contributes to the UK in macroeconomic terms, and to the lives of individuals and the operations of businesses. Our research found that the industry generated £281bn in economic output (GVA) in 2023 (the latest year for which data are available), equivalent to 12% of total UK GVA.
Meanwhile, a new tool from the Office for National Statistics uses input-output tables to quantify how particular goods and services are used by various industries. Using this tool, we can see in more detail how financial and related professional services act as a critical enabler of other industries. Among the industries that made greatest use of financial services in 2022 (latest available data)—that is, they were among the largest consumers of financial services—were real estate, construction, wholesale trade, and public administration and defence.[1] Among the industries that make use of related professional services, computer programming, public administration and defence, and electric power generation are among the most prominent.[2]
The tool also uses output multipliers to estimate how much additional economic activity is generated when output in a particular industry increases. Output multipliers estimate the so-called ripple effect, in economic terms. If we imagine a pebble dropped into a pond, the immediate splash is like the direct effect of output in a particular industry; the ripples that emanate from the initial splash are like the indirect and induced effects on the economy.[3] These effects—the ripples, in our analogy—are what output multipliers seek to measure.
The six different financial and related professional services sectors categorised by the ONS all have fairly similar multipliers ranging from 1.3 (accounting) to 1.6 (management consulting). The multipliers are shown in the chart below:
Output multipliers for financial and related professional services sectors
Source: Office for National Statistics
This means, for example, that if output of the accounting sector increased by £1m, then output of the UK economy overall, across all industries, would increase by an estimated £1.3m. To put this in context, output multipliers in other sectors range from 2.8 (electricity transmission and distribution) to 1.0 (services of households as employers of domestic personnel).
In short, there are various qualitative and quantitative metrics for analysing the impact of a particular sector on the wider economy. Our recent Economic Research measures the impact through key macroeconomic variables, and by giving examples of the industry’s contribution to businesses and individuals—for example, providing £246bn in mortgage finance, and £181bn in bank lending to small and medium sized enterprises (SMEs). The use of tools like input-output tables and metrics like output multipliers allows us to quantify the ripple effects of these services, demonstrating their wider impact. Taken together, these approaches provide a more nuanced picture of the truly enabling function the financial and related professional services industry provides.
[1] In our analysis, ‘financial services’ is the sum of financial service activities, insurance and pension services, and activities auxiliary to financial services and insurance services.
[2] In our analysis, ‘related professional services’ is the sum of legal services, accounting, bookkeeping and auditing services, and services of head offices and management consulting services.
[3] Indirect effect (Type I multiplier) measures the ripple effects through the supply chain. Induced effect (Type II multiplier) captures both those supply‑chain ripples and additional household consumption impact stemming from employee compensation.
