City’s top lobby group working on secret project to help London win more business and overtake New York as a financial centre
The City’s top lobby group is working on a secret project to help London win more business and overtake New York as a financial centre.
TheCityUK, which lobbies on behalf of a swathe of City giants, is drawing up recommendations for Government to boost the ‘competitiveness’ of London as a place to do business after Brexit, according to sources close to the plans.
The new strategy, which could be published as early as next month, will make a series of proposals on crucial issues including trade policy, regulation and investment into the UK. A source involved in the ambitious project said: ‘It’s ultimately about why firms should base themselves in London.’
Writing on the wall: A report by New Financial said the US ‘is the world’s top financial centre by a wide margin’ based on financial data such as the number of companies being floated
It is understood that TheCityUK is consulting with a number of trade bodies including UK Finance, which represents the banking industry.
The move comes as New York powers ahead as the world’s biggest financial hub. London lost the top spot in a ranking of global financial centres in 2018, with New York moving ahead, according to thinktank Z/Yen.
A report by New Financial said the US ‘is the world’s top financial centre by a wide margin’ based on financial data such as the number of companies being floated. Firms have raised $84billion (£60.5billion) in the US on the New York and Nasdaq exchanges this year to mid-July, compared with $12.7billion in the UK, according to consultancy EY.
The report concluded that the UK is ‘by far the largest’ financial centre in Europe, but warned that rivals in Asia are ‘catching up fast’.
The report added: ‘It is too early to capture the impact of Brexit on international financial activity but the UK’s lead in key sectors such as foreign equity trading and foreign bank assets will already have been dented.’
A separate report has warned that London’s position as a top City for financial services is being ‘challenged’ by Asia.
The UK struck a trade deal last year with the EU after Brexit, although this excluded the services sector, which represents about 80 per cent of the British economy. Some British policymakers are concerned that the UK is losing certain types of business to New York and parts of the EU.
London last month reclaimed its title as Europe’s top share trading hub after briefly losing its crown to Amsterdam following Brexit. The boost came after London opened its doors to trading in Swiss shares when it ditched an EU-wide ban on Swiss stock trading.
A boom in amateur share trading by people spending extra time at home because of Covid-19 has also buoyed British markets.
Policymakers are concerned that Britain could lose out to New York and China unless reforms to the City are quickly adopted.
The Government has commissioned sweeping reviews of the City to modernise the stock exchange and attract more fast-growing technology companies and entrepreneurs.
A review led by former Worldpay boss Ron Kalifa found that the US Nasdaq exchange attracts 40 per cent of companies going public, compared with just 5 per cent in the UK.
There is also mounting concern that Europe is planning to take some of the trading of complicated financial contracts away from London and shift it to Paris or Frankfurt.
A report in May said that £2.3trillion of monthly trading in these contracts has left the UK and gone to New York and cities in the EU.