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Abu Dhabi, UAEMonday 25 June 2018

London still world's favourite financial hub

Extends its lead over New York despite Britain’s looming departure from the European Union, survey finds

The Canary Wharf business district at dusk in London. The UK capital has retained its top slot as a global financial centre. Toby Melville/Reuters
The Canary Wharf business district at dusk in London. The UK capital has retained its top slot as a global financial centre. Toby Melville/Reuters

London remains the globe’s most attractive financial centre, extending its lead over New York despite Britain’s looming departure from the European Union, a survey found on Monday.

Britain’s departure from the trading bloc has led to some politicians and economists predicting London will lose its pre-eminent status as a financial centre, but there are few signs of that happening yet.

London was placed first, followed by New York, Hong Kong and Singapore in the Z/Yen global financial centres index (GFCI), which ranks 92 financial centres on factors such as infrastructure and access to high quality staff. New York was 24 points behind the British capital, the biggest gap between the two since the survey started in 2007.

New York’s ranking fell 24 points from last year, the largest fall among the top contenders, a dip the survey’s authors said was “presumably due to fears over US trade”. Since becoming the US president in January, Donald Trump has pulled out of a planned trans-Pacific trade agreement and is pursuing a more isolationist economic policy.

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Britain’s most powerful financial lobby group, TheCityUK, cautioned against complacency and called for clarity on its transitional arrangements for leaving the EU, which will apply beyond April 2019, when Britain is due to formally leave. “Absent this, many firms have already started to activate their contingency plans and others will undoubtedly follow suit if these aren’t confirmed as soon as possible – and by the end of this year at the very latest,” said Miles Celic, the chief executive of TheCityUK.

Since the survey was conducted in June, talks between Britain’s Brexit minister David Davis and his opposite number at the European Commission, Michel Barnier, have become increasingly acrimonious. The past two months have also seen a pick-up in the number of banks saying they plan to set up new EU subsidiaries after Brexit, with most major US, British and Japanese banks saying they will establish units in Frankfurt or Dublin.

Frankfurt has moved up to 11th in the table from 23rd a year ago and Dublin has moved to 30th from 33rd.