London and the wider UK is currently rated as one of the leading global financial centres. The UK’s trade surplus in financial services of $71bn in 2013, was more than twice the next largest trade surpluses recorded by the US, Luxembourg and Switzerland. The UK has the leading share of trading in many international financial markets such as cross border bank lending (17%), interest rates OTC derivatives turnover (49%), international insurance premium income (22%) and foreign exchange trading (41%). It is also a global leader in providing professional services.
The stability, transparency, fairness of treatment of all parties and skills base are just some of the factors which give the UK its advantages. The UK’s major competitors include New York, Hong Kong and Singapore, the latter two gaining advantage recently from the shifting global trade patterns. At the next level, a series of international financial centres have also made progress in recent years. Examples such as Tokyo, Shanghai and Toronto are being joined by the likes of Moscow, Istanbul and Dubai as they seek to develop their offerings, often with the assistance of UK-based firms and their expertise, through TheCityUK’s network of international relationships. This is not a zero sum game. The growth of emerging international financial centres may increase their market share, but at the same time this will grow London’s business volumes. The interdependent network of centres provides new opportunities and will both reflect and enable major global business needs.
The UK enjoys a clear competitive advantage in financial and related professional services but we need to make sure that this competitive advantage is not lost. It is therefore vital to promote the UK as a place to do business, which in turn will continue to bring jobs and growth across the country. This Key Facts report serves as a reminder of why the UK’s leading global position in international financial markets should be
valued and supported.
An important and necessary step forward in recognising the value of the industry came with the creation of the Financial Services Trade and Investment Board (FSTIB) in 2013. The FSTIB brings HM Treasury, UKTI, FCO, BIS and TheCityUK together to identify trade and investment priorities and to support UK based firms in pursuing these vigorously across the globe. FSTIB projects so far include ‘Investment Management’, ‘Renminbi Trading’, the ‘Insurance Growth Plan’, ‘Islamic Finance’, and ‘Financial Services in EU Trade Policy’. We look forward to continuing to work with the Government, our members and the wider financial and related professional services industry to extend the promotion of the sector in international markets.