London attracted foreign investment in more financial and professional services projects than any of its global peers last year, according to a new report from the City of London Corporation.
The City accounted for 114 of the 186 deals that came through the UK in 2021, sailing past peers such as Dubai, which clocked 104 projects, Singapore’s 103, and New York’s 54 deals.
The UK as a whole came second only to the US among countries attracting the most projects.
A third of all the UK projects were focused on the fintech sector, the report said, easily topping the 10% of projects that were in the banking space and the 10% that centred around private equity or venture capital.
While one would expect the figures from the City of London Corporation — the Square Mile’s governing body — to cast the financial district in a positive light, they add to a growing weight of research suggesting the capital has indeed managed to retain much of its financial services prowess in the wake of Brexit.
EY’s latest Brexit tracker and Schroders’ latest Global City Index, both published last month, show that London retained its top spot among global hubs and that the pace of job moves out of the capital had continued to wane.
While country-level trade deals struck since the split from the EU with the likes of Australia, Japan and New Zealand have drawn criticism for adding only negligible amounts to the UK economy, the figures suggest that the City’s private sector continues to pull in external interest.
Lord Mayor of the City of London, Vincent Keaveny, who is also a partner at law firm DLA Piper, described the capital’s combination of time zone, language, legal system, global talent, and financial services ecosystem as “unique”.
“Our position at the crossroads of Europe’s biggest financial and tech sectors make us one of the globe’s foremost hubs for innovation,” he added.
“Our fundamentals remain strong and the UK’s continuing appeal to investors is demonstrated by a robust pipeline of projects both in the capital and other regions” City of London Corporation policy chair Catherine McGuinness said. “It is vital that we continue to build on this success. We must future-proof the sector and make sure we remain globally competitive as we forge a new chapter in our trading history.”
Innovation and competition are the government’s watchwords for the City since Brexit. It is currently consulting on plans to make regulators at the Bank of England and Financial Conduct Authority give more weight to London’s international standing when they write their rules, as well as “assess compliance with relevant trade agreements” as part of its Future Regulatory Framework Review.
While the government has pushed to open up the UK’s financial sector to new economies, Europe remains a key source of foreign direct investment in financial and professional services firms, the City of London Corporation figures suggest — around a third of the projects in the UK were funded from Europe.
Switzerland, France and Germany were all among the top five largest investors in the UK’s financial and professional services sector.
The City’s importance to the wider UK economy was also underscored, with London noted for accounting for nearly two thirds of the investment projects in the study and nearly half of the jobs created.
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