London has kept its place as the top global financial centre in the world, according to a new report from the City of London Corporation, despite widespread concern over the state of the capital’s equity markets.
The report, which benchmarks the world’s cities across 101 metrics, found that London had seized the top spot partially due to its strength in sustainable finance, as well as talent and skills.
However, the City saw a decrease in both capital markets activity and assets under management over the last year, but the UK still maintained its spot as the second largest asset management hub, with £4.2 trillion managed for overseas clients.
Another key issue identified for the capital was the decline in the number of foreign companies listing in the UK, as its biggest rival New York sees its listings continue to increase.
London’s overall competitiveness score fell slightly from last year, dropping from 60 to 59, but managed to cling on as New York City fell from 60 to 57.
With office prices only half of New York’s, London has managed to bring down its office vacancy rate by 7.3%, while New York’s has grown 22.2%, the report noted.
Meanwhile, Singapore placed third again with a score of 48, while Frankfurt came fourth with 44 and Paris got fifth with 40.
Another key reason cited for the UK’s success was its high number of unicorns, or startups valued at over $1bn, more than Singapore, Germany and France combined.
The City corporation credited the newly introduced Financial Services and Markets Act and the Edinburgh Reforms for retaining the number one spot, arguing they boosted its “regulatory quality and openness to businesses”.
Chris Hayward, policy chair of the City of London Corporation, said: “I am pleased to see London retain its crown as the leading global financial centre after tying with New York City last year, but our competitive edge must be revived.
“These report findings are a testament to the success of recent regulatory changes which have sparked business optimism by removing barriers to international talent and ease of doing business.”
Lord Mayor of the City of London, Michael Mainelli, added: “Amid a range of macroeconomic and geopolitical challenges, this latest report shows how the UK’s financial services are key to driving growth and promoting the breadth of specialist expertise available in the City of London.
“With over 104 unicorns in London alone – many of them in the tech sector – it’s imperative that the UK strives to stake its claim as a tech superpower by maintaining its leadership in AI innovation and regulation and implementing world-leading digital transformation.”
