London is no longer the clear winner as the top financial centre in the world. New research shows that the US and EU are getting better at competing with the UK.
Research released by the City of London on Thursday shows that London is no longer the world’s top financial centre. This is partly because the UK is leaving the EU.
New numbers show that London and New York are now tied for first place as the world’s most important financial centres. Benchmarking data from the City of London’s governing body shows that this is the first year that the UK capital is not the clear leader because other financial centres are growing faster.
Executives in the financial services industry are worried about London’s ability to compete. They say the city could lose its top spot because of Brexit, which has caused many companies to move their headquarters to the EU.
“The UK is still one of the most open and global financial centres, with better access to international markets than the US, France, or Japan. But our advantage in the market is in danger,” said Chris Hayward, who is in charge of policy at the City of London Corporation.
“The number of international companies listed in London is falling,” according to the data, and fewer international companies are choosing to list in London. Instead, they are choosing to list in New York.
In the past few months, Arm, a major chip designer owned by SoftBank of Japan, and CRH, a large building materials company based in Dublin, Ireland, said they would leave the UK and try to get listed in the US.
“The announcement shows that the UK needs to move quickly on its regulatory and market reform agenda,” Julia Hoggett, CEO of the London Stock Exchange, said in early March. “This includes addressing the amount of risk capital available to drive growth.”
In response, the British government has proposed a number of changes to the UK listing market and pushed for less regulation in the banking and insurance sectors in order to bring in new business.
But there are worries that the US is a better place for companies to grow because the business culture there is less strict.
London’s overall competitiveness score went up from 59 in 2022 to 60 after the study was done. London and New York now both have the same number of points. Singapore came in third with a score of 51. Frankfurt, Paris, and Tokyo all got 46, 43, and 35, respectively.