It has been a worrying year for anyone who cares about London’s status as Europe’s premier financial services centre.
The steady stream of companies seeking a listing in New York rather than the Square Mile, the collapse in IPOs and M&A activity, and the mounting job losses all pointed to a crisis of confidence in the City after decades of unquestioned domination.
There has often been talk of Frankfurt, Geneva, Paris or Dublin muscling in on London’s territory and there is no doubt that after Brexit many of the global banks that made it their European headquarters after Big Bang have been rethinking their level of commitment.
But perhaps we should not overdo the gloom. There were always good reasons why London was number one in Europe — the English language, a huge pool of highly skilled labour, the sheer appeal of the city as a place to live — and they have not gone away.
Today a survey from consultants EY reveals that London’s hegemony is still unchallenged — for now — when it comes to direct investment into financial services.
Last year the capital secured 46 investment projects, up from 39 in 2021. London’s nearest challenger, Paris, drew 35 investments, down from 38, while Madrid was third with 22 investments, a fall from 29.
As the City of London Corporation put it today, that suggests the capital “continues to lead Europe in attracting foreign direct investment in financial services, and the sector is proving resilient despite the global challenges facing the UK economy”.
But, and this is a big but, these are last year’s figures, reflecting investment decisions taken many months ago. London and the UK’s global reputation has taken a big knock since then, particularly from the political chaos that culminated in Liz Truss’s short-lived premiership last autumn.
The investment figures are welcome but should not be an excuse for a single moment of complacency.
