30 March, 2018, 12:00 am
LONDON has been a critical artery for the flow of money around the world for centuries. The financial services sector accounts for about 12 per cent of Britain’s economic output, employs about 1.1 million people and pays more taxes than any other industry.
From its traditional City heartland to the brash Canary Wharf skyscrapers and plush Mayfair townhouses, London represents one of the greatest concentrations of financial wealth on earth.
Its only rival, New York, is centered on American markets, while London has more banks than any other hub, dominates markets such as global foreign exchange and commercial insurance and is home to international bond trading and fund management.
But about a third of the transactions on its exchanges and in its trading rooms involve clients in the European Union. These may be jeopardized after Brexit unless Britain manages to maintain similar levels of access to the trading bloc.
The French finance minister predicts Paris will overtake London as Europe’s most important financial centre in a few years, although supporters of leaving the EU say Britain will benefit over the long term by setting its own rules.
London remained top of the rankings in the annual Global Financial Centres Index released this week by Z/Yen Partners and the China Development Institute, although the gap between it and New York in second closed to one point on a scale of 1000 and its rating rose by less than the other four top centres.
Reuters is publishing its second Brexit tracker, monitoring six indicators to help assess the City’s fortunes, taking a regular check on its pulse through public transport usage, bar and restaurant openings, commercial property prices and jobs.
Almost a year before Britain is due to leave the EU, the tracker suggests London’s financial districts have been held back, but there is no evidence of a mass exodus.