According to a survey by Lloyds Bank, financial leaders are still determining London’s future as a leading global financial centre. The poll of high-ranking executives at major corporations reveals growing concerns that London’s status as one of the world’s primary financial hubs, alongside New York, maybe in jeopardy.
City A.M., a prominent business newspaper, reported the findings earlier this week, indicating that 64% of financial sector leaders surveyed believe London’s position as a global financial hub could remain stagnant compared to its competitors.
London’s historic financial district, often called “the City,” houses critical institutions such as the London Stock Exchange and the Bank of England.
Lisa Francis, Managing Director of Lloyds Bank Corporate and Institutional Banking, expressed her belief to the newspaper that the City of London is a significant financial centre at a pivotal juncture.
Concerns have arisen regarding a crisis of trust within the district as London’s listed markets witness a gradual exodus of companies to other major stock exchanges. An example is Arm, a UK-based chip manufacturer, which succeeded on the Nasdaq stock market in New York after the British government failed to secure its listing in the UK.
If London loses its status as a top global financial hub within the next five years, a quarter of surveyed companies indicated they would consider relocating some of their UK-based employees abroad.
David Gauke, Head of Public Policy at Macfarlanes and a former Treasury Minister, emphasised the impact of various factors, including political uncertainty, Brexit, and intensified international competition, which cast doubt on London’s enduring dominance.
In response to these concerns, Chancellor Jeremy Hunt unveiled a series of “Edinburgh reforms” reforms in December. These measures aim to stimulate investment and accelerate economic growth by eliminating cumbersome remnants of EU legislation.
Among the notable legislative changes, the UK government has passed the Financial Services and Markets Bill, granting local regulators the authority to make decisions previously handled at the EU level.
Approximately 80% of survey respondents believe stronger ties between the UK and the EU would enhance London’s significance as a financial centre.
At the same time, two-fifths advocate for simplified entry for skilled workers into the country. Gauke stressed the need for the UK to demonstrate its commitment to being an open economy capable of attracting talent and investment, fostering innovation, and providing a stable political and regulatory environment.