Financial services are widely recognised as playing an important role in the national economy. That they are centred in London is also well known. But the role that both this sector and related professional services plays elsewhere in the country, and the links that these activities have with the capital, are less well understood.
This report explores these questions. It finds that financial services and related professional services play an important role in a number of other cities across the country, in terms of exports, jobs and productivity. For example, financial services account for 58 per cent of exports in Edinburgh, 12 per cent of private sector jobs in Ipswich and are the most productive sector in Cardiff.
The links that the jobs in these sectors have with London-headquartered businesses are significant – overall these businesses accounted for just under 220,000 jobs in other British cities in 2017. This meant that just under 40 per cent of all of urban Britain’s finance and related jobs were in a London-based firm.
These links vary across cities, both in terms of their number and their nature. While not everywhere had strong links with London, a number of cities had a large share of financial services jobs in particular in London-headquartered firms.
These jobs vary in their nature. In cities such as Brighton, Leeds and Bristol, this large share of jobs tended to be in high-skilled activities. Cities such as Sheffield, Sunderland and Swindon also had strong links to the capital, but the types of jobs tended to be lower-skilled activities, suggesting that the jobs they have attracted have tended to be more back office in their function. This reflects the relative benefits that different places offer to businesses, with Leeds offering a more highly-skilled workforce than Sheffield, for example.
Both the performance of financial and related services across the country and their links to the sector in the capital show that the fortunes of these activities do not just have implications for London. And so as the UK looks to change its trading relationships with the world, a deal for financial services will be important for a number of cities and not just the capital.