UK trade surplus in finance to reach record £61bn

The UK is now the world’s leading exporter of financial services - the value of the UK’s trade surplus in financial services is double that of the next largest country trade surpluses recorded by Switzerland, the US and Luxembourg.

Key Facts about UK Financial and Related Professional Services reports that the surplus in financial and related professional services trade is up nearly 10% on 2012, contributing strongly to the UK recovery. For the first time, the trade surplus for the sector has risen above the UK’s 2008 pre-recession peak of £58.7bn.

The new figures reveal that the sector’s trade surplus is bigger than the combined surplus of all other net exporting industries in the UK and is playing a key role in offsetting the UK’s goods trade deficit totalling more than £100bn. The value of sector’s exports at £83bn, is more than three times the £26bn spent by tourists visiting the UK.

The UK is now the world’s leading exporter of financial services - the value of the UK’s trade surplus in financial services is double that of the next largest country trade surpluses recorded by Switzerland, the US and Luxembourg. 

To put the £61bn in context, the trade surplus contributed by financial and related professional services equates to the cost of building more than 100 new hospitals (comparison: the Queen Elizabeth Hospital, Birmingham opened in 2010 at a cost £545m). 

Chris Cummings, Chief Executive of TheCityUK, commented: “The £61bn peak figure out today highlights the key role played by UK financial services in the increase in jobs and growth – growth we are now seeing all across the UK.  This is coupled with a 17 year high in optimism amongst firms in our sector as industry confidence builds at a pace not seen since the 1990’s.   

“Increasingly, UK financial and professional services firms are the face of British business across the globe and we are trading with partners including the US, EU Member States, Switzerland, Japan, Australia and Canada. We are also increasing our business with emerging markets including Russia, Saudi Arabia, South Africa and Turkey. The volume of trade with emerging markets has strong potential for further growth.

The report further shows that productivity of the sector is strong right across the UK:

  • Industry output at 12.6% is above the 7.4% contribution to UK employment, indicating that productivity levels for financial and related professional services are well above the average for the UK economy. In addition and in line with its global reach, around a third of the sector’s contribution to GDP arises from services provided to overseas clients.
  • The average worker in the financial and professional services sector contributes £83,000 to the economy, compared with a £46,000 UK average for other sectors. The highest value-added activity is concentrated in London which has a contribution to GDP per worker that is 34% above the industry average at £111,000. In all UK regions, the GDP per financial and related professional services worker is higher than £57,000.
  • The report also reveals the positive impact of a strong financial services workforce on UK regions, with those geographical areas that have a higher share of GDP coming from financial and related professional services typically seeing faster track growth.

Chris Cummings continued: “Today’s surge in trade surplus to £61bn shows that financial and professional services are a key accelerator for growth, the importance of which goes well beyond London and the South East. 

“More than 2 million employed in the sector – this equates to a city the size of Greater Manchester. Two thirds of these are based outside London. A strong financial centre in London is good for regional economies, but it is very much a mutually beneficial relationship with strong regional centres increasing the global appeal of London by widening the talent pool and offering significant growth opportunities to international firms.”