UK retains crown as global financial services exporter

The UK remains the world's biggest net exporter of financial and related professional services, according to a report published today that urges the UK government action to maintain its status.

The report said cities including Edinburgh and Glasgow make a key contribution. Picture: Jon Savage

The latest report from industry-led body TheCityUK found that these key areas in 2017 generated an industry trade surplus of £68 billion, nearly equal to the next three leading net exporting countries combined, namely the US, Switzerland and Luxembourg.

Including related professional services, such as legal, accounting and business advice, the UK’s combined financial and related professional services trade surplus came to about £83bn.

The annual report, titled “Key facts about the UK as an international financial centre”, looks at a sector that contributes a tenth of the UK’s total economic output.

Its publication also comes as Brexit negotiations continue, with the UK government saying a deal is “95 per cent” complete.

And the report has found that about 44 per cent of the trade surplus was generated by trade with the EU, more than double the 19 per cent with the US, with 3 per cent by Japan and Switzerland respectively, and the remainder generated by other countries.

Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “The UK is not only a leading global financial centre, it is also Europe’s financial hub.”

She said that although this will still be the case after the UK exits the EU, Brexit has underlined the UK’s need to strengthen its trade and investment relationships with key nations outside the bloc, such as the US, Japan, Switzerland, China and India.

Bardalai added: “The UK currently has a clear competitive advantage in financial and related professional services, and it is vital that this position is not inadvertently eroded. The government must be proactive in reinforcing the global attractiveness of the UK as a place to invest and do business.”

Among the report’s findings are the UK being the world’s leading venue for foreign exchange trading, while more than twice as many euros are traded in the UK as in the eurozone, and nearly twice as many US dollars traded as in the US.

It also ranks as the world leader in cross-border bank lending and international debt securities, with 18 per cent and 13 per cent of global market share respectively.

The report also noted London’s pivotal role in the UK’s global standing, although two-thirds of the 2.3 million relevant jobs are outside the UK capital, with cities including Edinburgh and Glasgow making a key contribution.

Scotland is believed to employ about 100,000 people directly in financial services.

It is also building its reputation as a hotbed of financial technology – or fintech – with firms in this area including Edinburgh’s Nucleus, which listed on the Alternative Investment market in July.