London is no longer the world’s top financial center, in large part due to the nation’s exit from the European Union, according to a new report published by the City of London.
The latest data shows that both London and New York now share the top spot as equally important leading financial centers globally. Benchmarking data produced by the City of London’s governing body revealed this is the first year that London has failed to clearly demonstrate its global leadership of all financial centers, due to the more rapid growth of other financial centers across the globe.
Executives at financial services companies had raised concerns over the competitiveness of London, noting that after Britain exited the EU, many companies moved their headquarters out of London, and to the EU.
Chris Hayward, policy chairman at the City of London Corporation, said, “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.”
According to the report, the new data shows that, “the number of international companies listed in London is falling” as fewer global companies are choosing to list in the UK, choosing instead to opt for a New York listing.
Arm, a major chip designer owned by Japan’s SoftBank and Dublin-based building materials giant CRH, was just the most recent example, when in recent months it departed the UK and sought a listing in the US.
Julia Hoggett, chief executive of the London Stock Exchange, had said, “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.”
In an attempt to rectify the problem, the British government has prepared a range of initiatives to reform the UK listings market as it has sought to deregulate the banking and insurance sectors to drive new business.
Still the United States’ far less restrictive business culture continues to leave London concerned it is not doing enough, as the United States remains more attractive to businesses.
In the report, London increased its competitiveness score one point, rising from 59 to 60 in 2022. However New York increased its score two points, from 58 to 60, tying London for the top spot. Coming in at third place was Singapore, with a score of 51, as Frankfurt scored a 46, Paris scored 43, and Tokyo came in at 35.
