London Now the Global Financial Centre, but Brexit Concerns Could Affect Pole Position
With the deadline for Brexit fast approaching, many businesses and individuals have expressed their views on the future of the United Kingdom and the outlook for London following the country’s imminent EU exit.
According to the Global Regulatory Outlook report, carried out annually by leading global valuation and corporate finance advisor Duff & Phelps, London is today regarded as the world’s leading financial sector, having replaced New York for the first time in five years.
Senior professionals from financial institutions across the globe were asked a series of questions about the future of their sector, with questions ranging from cybersecurity to the impacts of Brexit.
With 53% asserting that London is the world’s main centre for finance, this certainly shows a notable improvement in attitudes to the city and heightened confidence compared with last year, where just 36% of respondents saw London as the world’s finance capital. This highlights that attitudes towards London as a global finance capital are improving.
That being said, when asked whether they think London will retain its top position in the coming years, only 29% said yes, while 52% of those surveyed asserted that New York will recover its leading position by 2023. Further, cities such as Dubai and Mumbai are largely regarded as emerging global finance hubs, with 27% of respondents predicting that Dubai will fast emerge as a leading financial centre within the next five years, while 14% feel that Mumbai has the same prospects. Additionally, cities such as Shanghai, Singapore and Sydney have similar potential.
Concerns around Brexit remain high, with 64% maintaining that Britain’s exit from the EU will definitely impact their current compliance programmes, and could, therefore, damage the city’s competitiveness in the next five years. London-based respondents were particularly less confident about London’s future when compared with respondents from Paris or Frankfurt, with 15% stating that Brexit has already impacted their compliance function. Meanwhile, a further 33% believe that within the next 18 months Brexit will undoubtedly have an impact.
With Brexit at the forefront of many finance professionals’ concerns, it remains essential that very careful decisions are made if the city is to uphold its top status as the finance capital of the world in impending years, as these decisions will be highly influential for many years to come.