Financial and related professional services a pillar of UK economy

Financial and related professional services remain critically important for the UK, supporting people in their everyday lives and providing vital funding for public services, according to the latest annual ‘UK Key Facts’ report from TheCityUK.

The report, based on the latest available data [2], shows that the industry remains a major national employer, with 1 in 14 UK-based workers (over 2.3 million people) employed in financial and related professional services – two thirds of whom are outside London.

The financial services sector also remains a major source of tax receipts, accounting for £10.50 in every £100 of tax paid to the exchequer, a total of £75.5bn in 2018/19, equivalent to 42% of the total health budget.

Across their domestic and international activity, financial and related professional services firms contributed £200.5bn to UK gross value added (GVA), representing £10 in every £100 of UK economic output.

Financial and related professional services also generated a trade surplus of £84.1bn in 2018, nearly equal to the trade surpluses of the next two leading countries combined, the US and Switzerland. The industry’s trade surplus in 2018 was more than all other UK net exporting industries combined.

The industry is often the face of British business across the globe, contributing ‘soft-power’ as well as economic and commercial success.

The UK has one of the largest and most developed markets for professional services, including accounting, management consulting and legal services. These three sectors contributed £21.6bn, £15.1bn, and £28.8bn respectively to UK economic output in 2018.

The UK Key Facts report also shows that in recent years the industry has been making multi-billion pound investments to enable customers and other businesses to take advantage of digital innovations such as internet banking, contactless payments, Law Tech and the use of AI.

Anjalika Bardalai, Chief Economist and Head of Research, TheCityUK, said, “We cannot yet know the full long-term impact Covid-19 will have on the economy, but what is clear is that this industry will be critical to keeping the economy going through this crisis, and essential to supporting the recovery afterwards.

“The financial and related professional services industry is a pillar of strength for the UK, making a substantial contribution to employment, tax receipts, and the balance of payments. It’s not only a vital economic asset, but also makes a real difference to people in their daily lives, helping them save for the future, invest in a business and protect and manage risk.