Financial and professional services projects in London attracted more financial investment than any of the city’s peers last year, according to a new report from the City of London Corporation.
The financial district of the UK capital city accounted for 114 of the 186 deals that came through the UK in 2021, beating Dubai’s 104 deals, Singapore’s 103 and New York’s 54.
The UK as a whole came second only to the United States among countries attracting the most projects. A third of UK projects focused on the fintech sector, the report said, easily topping the 10 per cent of projects in banking and the 10 per cent in private equity or venture capital.
In Europe equity capital markets activity slumped by 77 per cent and by 87 per cent so far in 2022, according to data provider Dealogic, with initial public offering volumes falling by 71 per cent globally to $67 billion.
The City of London Corporation is the ‘square mile’s’ (financial district) governing body so one would expect its figures to show the financial district in a positive light. However, they add to a growing body of research that suggests the capital has managed to retain much of its financial services prowess following Brexit.
EY’s latest Brexit tracker and Schroder’s latest Global City Index, both published in March, show London has retained its top spot among global hubs and that the pace of job moves out of the capital had continued to wane.
Trade deals struck with countries such as Australia, Japan and New Zealand have brought criticism for adding only negligible amounts to the UK economy – nevertheless expanding the trading horizon – but the figures suggest that the City’s private sector continues to pull its external interest.
The Lord Mayor of the City of London, Vincent Keaveny, who is also a partner at law firm DLA Piper, described the capital’s combination of time zone, language, legal system, global talent and financial services ecosystem as “unique”.
He added: “Our position at the crossroads of Europe’s biggest financial and tech sectors make us one of the globe’s foremost hubs for innovation.”
City of London Corporation policy chair Catherine McGuinness said: “Our fundamentals remain strong and the UK’s continuing appeal to investors is demonstrated by a robust pipeline of projects both in the capital and other regions. It is vital that we continue to build on this success.
We must future-proof the sector and make sure we remain globally competitive as we forge a new chapter in our trading history.”
Innovation and competition are the government’s watchwords for the financial district since Brexit.
It is at present consulting on plans to make regulators at the Bank of England and Financial Conduct Authority to give more weight to London’s international standing when they write their rules, as well as “assess compliance with relevant trade agreements”, as part of its Future Regulatory Framework Review.
The government has pushed to open up the UK’s financial sector to new economies. However, the rest of Europe remains a major source of foreign direct investment in financial and professional services firms, the City of London Corporation’s figures suggest – around a third of the projects in the UK were funded by investors in other European countries.
The financial district’s contribution and importance to the wider economy was also underscored, with London noted for accounting for nearly two thirds of the investment projects in the study and nearly half the jobs created.
Oman Observer is now on the WhatsApp channel. Click here
