The financial services sector plays an important role in the national economy. In terms of jobs, it accounts for 3.5 per cent of all of Britain’s roles, but in terms of output, it accounts for 6.6 per cent of economic activity. This reflects its position as one of the most productive parts of the national economy. It also plays a particularly important role for Britain’s trade with countries abroad. It accounts for 16 per cent of all goods and services the UK sells abroad, and 39 per cent of all services exports.
However, the role of financial services and other professional services related to it varies across the country. While London plays a leading role for the financial services industry, there is currently a lack of clear evidence for the contributions made by other cities to financial exports and jobs, and the relationship between London’s strengths and the performance of other cities.
Understanding these gaps in the evidence has a particular urgency due to the uncertainty of how Brexit will change financial services exports. If financial services play an important role in city economies across the UK, then changes to both the regulatory regime for financial services and trade deals that may result will have consequences for cities outside of London.
Public data shows us that two thirds of financial services jobs are outside of London, but that the capital remains the vital global centre for financial services firms. The purpose of this briefing is to better understand the geography, structure and organisation of financial and professional services across the UK to do three things. The first is to provide a first look into the export of financial services by UK cities. The second is to investigate the nature of financial services across UK cities. And the third is to look at the links that London-based firms in these sectors have across cities to understand the relationships between them.