Financial and related professional services continue to drive economic growth across the UK

Press release
12 March 2024

New economic research from TheCityUK underlines the substantial impact the UK-based financial and related professional services industry has on the UK economy in terms of job creation and economic contribution, as well as in fostering innovation, driving technological advancements and enabling wider economic growth.

The ‘Key facts about UK-based financial and related professional services 2024’ report shows that in 2023, the industry contributed a substantial £243.7bn to UK real gross value added (GVA), representing around £12 in every £100 of economic output. It also continues to be a major national employer, employing over 2.4 million people in 2022 – or almost one in every 13 people in employment – with two thirds of these jobs based outside London in cities such as Birmingham, Edinburgh, and Manchester.

Productivity in the financial services sector is nearly 2.5 times higher than the whole-economy average, with output per hour £97.30 in 2022, compared with £40.50 across all sectors. This places the financial services sector second-only to Real Estate (£297) in terms of sector productivity.

The LawTech sector continues to be a standout, with the UK recognised as a global centre and home to 43% of all LawTech startups in Europe. The latest data shows the significant annual average growth rate of investment in LawTech between 2017 and 2020 at 101%, surpassing the growth rates of other similar sectors such as FinTech (20%), ClimaTech (5%) and HealthTech (47%).  

Anjalika Bardalai, Chief Economist and Head of Research, TheCityUK, said: “The data presented in our new report highlights the substantial contributions made by the financial and related professional services industry. From fostering innovation and driving economic growth across the country to serving as a cornerstone of economic resilience and technological advancement, the impact of this industry is far-reaching.”

Other highlights from the report include:

  • In 2022, financial services had more than 1.1 million people in employment, predominantly in banking (371,000) and insurance (320,000), with fund management (68,000) and other financial services roles (307,000) also contributing significantly.
  • Related professional services boast nearly 1.4 million people in employment, including 536,000 in management consultancy, 476,000 in accountancy, and 368,000 in legal services.
  • The UK remains the largest and most developed market in Europe for related professional services. Accounting, management consulting, and legal services contributed £28.2bn, £14.9bn, and £30.4bn respectively to the UK's real output in 2023.
  • In 2022-2023, 29% homeowners in England secured their homes through mortgages provided by the industry.
  • The outstanding loans from major banks to UK businesses amounted to £527.6bn as of November 2023, with 35.1% of this capital lent to SMEs.
  • In 2022, UK private equity funds invested £27.5bn in over 1,600 UK companies. Regionally, London accounted for 56.3% of the total amount of capital invested, a significant increase from 35.5% in the previous year. The East Midlands followed with 13.8%.
  • The AIM market, a leading platform for small companies in Europe, saw 753 companies raising £1.6bn through new and additional share issues in2023.
  • Aquis Stock Exchange (AQSE) is another important UK-based stock market providing primary and secondary markets for equity and debt products. In 2023, there were 85 companies quoted on the AQSE that raised around £93m through new and further issues.

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