For my first blog post of 2018, I’m delighted to be able to highlight a brand new piece of economic research.
'Exporting from across Britain', which we launched last week, builds on a new dataset from the Office for National Statistics (ONS) that analyses services exports by UK region, TheCityUK has estimated the value of financial and related professional services exports from the UK regions and nations.
Given London’s role as the world’s leading international financial and related professional services hub, it is no surprise that London accounts for the lion’s share of industry exports, at 48% of the total. But it may come as a surprise to consider that the UK’s other regions and nations—which many people imagine solely as centres servicing domestic clients—collectively account for just over half of total exports. There is wide variation in the levels of regional industry exports, but aside from London, the South East, Scotland and the North West were notable for their overseas sales.
Our new report furthers our existing research in a number of ways. My last post highlighted the industry’s significant trade surplus, as detailed in our International Key Facts report. But the export and import data that underlie this headline figure are for the UK as a whole, so they give us no sense of the contributions that the different parts of the country make to the total. For the first time, we have examined the regional breakdown of industry exports, adding insight and nuance to one of the best-known industry statistics. Our research has also analysed the contribution that financial and related professional services make to regional employment and output. By being able to analyse the external sector as well, we are now painting a fuller picture of the industry’s regional economic contribution.
There is, of course, yet more work to be done; although this new research adds to our understanding of the industry’s role in the regions, some questions remain unanswered. For example, as the UK seeks to negotiate its post-Brexit trade relationships, some will inevitably wonder whether our research offers clues as to the likely impact on regional financial and related professional services exports once the UK has formally left the EU. But since the data cover only the period through 2016, it would be impossible to extrapolate, especially since post-Brexit trade performance will be determined more by the details of the UK’s new relationships with the EU and with other countries than by historical trends. Similarly, the report itself does not offer a view on the extent to which sterling’s depreciation in the second half of 2016 supported growth in financial and related professional services exports in that year—although I have written about the issues that pertain to this question here. So although our understanding of the industry’s economic contribution has grown with this new research, I see this particular picture as one that will continue to be developed further in the months ahead.