The UK capital has surrendered its lead as the world’s top financial center, partly due to the country’s exit from the EU, research published by the City of London on Thursday has revealed.
New figures show that London and New York now share first place as leading financial centers globally. According to benchmarking data by the City of London’s governing body, this is the first year that the UK capital has not been the clear leader as other financial centers are growing faster.
Financial services executives have raised concerns about London’s competitiveness, saying the city risks losing its top spot in the wake of Brexit, which prompted a number of companies to move their headquarters to the EU.
“The UK remains one of the most open and global financial centers with better access to international markets than the US, France, or Japan. But our competitive advantage is at risk,” said Chris Hayward, policy chairman at the City of London Corporation.
Data shows that “the number of international companies listed in London is falling” and fewer international companies are choosing the UK capital for listing, opting instead for New York.
In recent months, Arm, a major chip designer owned by Japan’s SoftBank and Dublin-based building materials giant CRH, announced its decision to move from the UK and seek a listing in the US.
“The announcement demonstrates the need for the UK to make rapid progress in its regulatory and market reform agenda, including addressing the amount of risk capital available to drive growth,” Julia Hoggett, chief executive of the London Stock Exchange, said earlier in March.
In response, the British government has outlined a range of initiatives for reforms to the UK listings market and pushed for deregulation in banking and insurance to drive new business.
However, there are concerns that the US is more attractive for companies to grow their businesses due to a less restrictive business culture.
The research gave London an overall competitiveness score of 60, up from 59 in 2022. New York increased its score by two points to equal London. Singapore was third, scoring 51, while Frankfurt scored 46, Paris 43, and Tokyo 35.
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