Last week we published our final economic research report of 2017: the latest edition of our annual 'Key facts about the UK as an international financial centre report'.
This research demonstrates the UK’s position as the leading global financial and related professional services hub using a wide range of market-share data—for example, the UK’s share of the global markets for foreign-exchange trading or cross-border bank lending. The report also includes the latest data on the UK’s position as a net exporter of financial and related professional services.
This last data point is perhaps the most telling in terms of the UK's overall financial services competitiveness. In 2016 the UK’s trade surplus in financial services was $77bn, compared to $41bn in the US (the next-largest net exporter of financial services). Breaking down the data from UNCTAD shows that although the US exported financial services worth $114bn, compared to the UK’s $91bn, the value of US imports ($74bn) was also far larger than that of the UK ($14bn), allowing the UK to record a larger surplus. Interestingly, both imports and exports in the UK were heavily weighted towards financial services excluding insurance and pensions, whereas in the US, insurance and pensions exports represented 15% of overall financial services exports, but fully 66% of imports in 2016.
We have often made the point that the trade surplus generated by the sector provides critical support to the balance-of-payments position given the UK’s sizeable (and structural) merchandise trade deficit. The latest trade surplus data reinforce that macroeconomic message.
This report and its data also provide a perfect bridge to our upcoming economic research work, as we will start the year with a brand new report analysing financial and related professional services exports from each of the UK’s regions and nations. This research will build on new data released by the Office for National Statistics that allows us, for the first time, to quantify the regional contributions made by the industry’s overseas sales. So as 2017 comes to a close, I wish readers of this blog a very happy and prosperous new year - and encourage you to continue to watch this space in the weeks ahead!