Considering both volumes and values presents two different pictures of industry exports
Our first report of 2025 was the latest edition of our annual research demonstrating the UK’s role as one of the world’s leading international financial and related professional services centres. In our ‘Key Facts about the UK as an international financial centre’ report, we noted that the UK maintained the world’s largest financial services trade surplus, at $98.1bn in 2023. When related professional services – legal, accounting and management consulting services – are also taken into account, we estimated the total financial and related professional services surplus to be around $125bn.
Financial and related professional services is one of the UK’s top-exporting industries, and those exports are a crucial measure of the industry’s international competitiveness. This means it pays to examine export data as closely as possible, to deepen our understanding of the trends. For example, in a blog post a few months ago I analysed sub-sector contributions to overall industry export growth.
This new post offers a different sort of deep dive: it looks at the difference between export volumes and export values (and also analyses these over a longer historical period). These two measures of exports look at different aspects of overseas sales. Volumes refer to the quantity of services sold overseas, expressed in monetary terms (e.g., pound sterling—or, when making international comparisons, US dollars). Meanwhile, values represent the total monetary value of the overseas sales, based on their prices. Prices can of course vary based on factors like inflation, so changes in values do not necessarily track changes in volumes.
From our deep dive into financial services exports, we found that although values increased fairly steadily between 1997 and 2023, the sector’s export volumes rose only until 2008, after which they declined sharply for the next two years (not exactly surprising, given the global context!) and then remained relatively stable.
First, let’s consider export values. The chart below shows the increasing trend. From 2008 onwards, insurance exports became more important in driving overall financial services exports: insurance sub-sector export values rose by an annual average of 6.6% over the 27-year period, but this figure rose to 7.2% a year since 2008. The particularly pronounced rise in insurance export values after 2020 is evident from the chart. In contrast, for financial exports, the growth rates were 7.9% a year over the 27-year period but only 4.2% a year in the post-global financial crisis period.
UK Financial services exports (value)
Source: Office for National Statistics
In contrast, in volume terms, financial services exports show very different trends before and after 2008, as can be seen in this chart:
UK Financial services exports (volume)
Source: Office for National Statistics
The global financial crisis period triggered a significant decrease in export volumes: in volume terms, the rising trend for total UK financial services exports reached its peak in 2008. Thereafter, export volumes remained relatively flat. Again, it is worth looking at the sub-sector level to see the differences in trend. The rise in total industry export volumes over 1997-2008 was driven by financial exports, since insurance export volumes declined by an annual average of 0.4% over the period. However, in the period after the global financial crisis, insurance export volumes increased by an average of 5.3% a year, whereas financial export volumes declined by an average of 1.1% over 2008-2023.
Overall, therefore, we can see that in the post-crisis period, insurance has made a notable contribution to financial services exports both in volume and value terms. As for the diverging trends in financial services export volumes and values since 2008, there is no single definitive explanation, but the high inflation experienced in recent years is likely to have played at least some part. Another possible explanation is increasing value-addition in some financial services sub-sectors, potentially allowing export-price inflation over and above more generalised inflationary factors. Our latest analysis therefore highlights the importance of considering different measures of exports to gain a more comprehensive understanding of UK financial services’ overseas sales, especially in the context of recent economic changes.
