London still number one financial centre in the world despite listings pain
London is still the top global financial centre, according to a new report from the City of London Corporation. Despite worries about the city’s stock markets, London holds its position due to strengths in sustainable finance, talent, and skills.
The report, comparing cities worldwide, found that London’s success is partly because of its strong performance in sustainable finance, as well as its talented workforce. However, the city experienced a drop in capital markets activity and assets under management over the past year.
Although London’s overall competitiveness score slightly decreased, going from 60 to 59, it managed to stay ahead of New York City, which dropped from 60 to 57. The report also highlighted that London’s office prices are only half of New York’s, and the city reduced its office vacancy rate by 7.3%, while New York’s increased by 22.2%.
The report identified a concern about the decline in foreign companies listing in the UK. In contrast, New York’s listings continue to grow, posing a challenge for London.
Despite these challenges, the UK retained its position as the second-largest asset management hub globally, managing £4.2 trillion for overseas clients. The report credited the success to many unicorns (startups valued over $1 billion) in the UK, surpassing Singapore, Germany, and France combined.
The City of London Corporation attributed London’s success to recent regulatory changes, including the Financial Services and Markets Act and the Edinburgh Reforms. These changes enhanced regulatory quality and business openness, contributing to London’s continued status as the leading global financial centre.
Chris Hayward, policy chair of the City of London Corporation, expressed satisfaction with London’s top position but emphasized the need to revive its competitive edge. He credited recent regulatory changes for removing barriers to international talent and easing business operations.
Lord Mayor of the City of London, Michael Mainelli, highlighted the importance of the UK’s financial services in driving growth. He emphasised the need for the UK to maintain leadership in AI innovation and regulation to establish itself as a tech superpower.