The UK continues to be the world’s largest financial services net exporter, with a trade surplus of $98.1bn (£78.9bn) in 2023, ahead of the US ($73.1bn) and more than Singapore ($30.9bn), Switzerland($30.3bn) and Luxembourg ($26bn) combined, according to TheCityUK’s latest research.
When related professional services, such as legal, accounting and business advice, are added, the UK’s combined financial and related professional services trade surplus reached around $125.3bn (£100.7bn) in 2023.
The annual report, ‘Key facts about the UK as an international financial centre’, sets out the facts and data underpinning the value of UK-based financial and related professional services, demonstrating the scale of its global competitiveness.
It also shows that the UK’s largest trading partner in financial and related professional services continues to be the US (35.7%). The EU accounts for 30% of sector exports, with Germany (5.2%), Ireland (5.2%) and Luxembourg (4.7%) being the top European destinations.
Anjalika Bardalai, Chief Economist and Head of Research, TheCityUK, said, “The UK’s financial and related professional services industry has remained resilient and an international success story despite a range of pressures and tensions weighing on global growth prospects.
“The UK not only continues to be the largest net exporter of financial services, it also maintains a globally leading share of a number of financial markets, such as derivatives and cross-border bank lending. Its strengths not only translate into stronger economic prospects for the UK, but also for other countries through, for example, the provision of trade finance.”
Key facts from the report include:
Related professional services
- The UK is a major international centre for related professional services, notably in business management and management consulting with net exports reaching £24.8bn in 2023. Legal services generated net exports of £7.6bn, and accounting services saw net exports of £1.8bn in the same year.
Banking
- UK banking sector assets totalled £9.4trn at the end of the third quarter of 2024, the fourth largest in the world and the second largest in Europe.
- The UK is the world’s largest centre for cross-border banking. It had a 14.6% share of the outstanding value of international bank lending in the second quarter of 2024, the highest in the world. It was also the second-largest centre for cross-border borrowing (15.8%) just behind France (16%).
- The UK accounted for 38% of global foreign exchange trading in April 2022, well ahead of the US (19%), Singapore (9%), Hong Kong (7%) and Japan (4%).
- Around twice as many US dollars are traded on the foreign exchange market in the UK than in the US.
- London remains the biggest renminbi foreign exchange centre and the second largest payments centre outside of Greater China. London accounted for 37.3% of total offshore renminbi transactions in December 2023, down 0.83% from December 2022.
Insurance
- The UK insurance industry is the largest in Europe and third largest in the world, with £301bn ($375bn) in premiums in 2023.
- The UK is the largest source of pension funds in Europe, with £2.6trn ($3.2trn) in assets under management in 2023.
- In 2023, the UK insurance and long-term savings industry was the largest in Europe and played an essential part in the UK’s economic strength, with members of the Association of British Insurers (ABI) managing investments of £1.4trn, ($1.7trn).
- The London Market[1] controlled 8% of the total global (re)insurance market in 2022, making it the largest underwriting centre in the world. London is also the only place where every global top 20 insurance and reinsurance firm has a presence.
Equity and bonds
- London continues to be an important centre for global equity trading, with 271 foreign companies listed on the London Stock Exchange (LSE) as of September 2024, ranking it third in stock exchanges globally by this metric.
- In the first 11 months of 2024, companies raised capital through new issues and IPOs equivalent to £697m ($892m) on the LSE.
- The UK has one of the highest equity market capitalisations in relation to GDP of the largest countries –70.4% at the end of 2023.
FinTech
- The UK is the world’s second largest destination for FinTech investment, after the US, and continues to be the most attractive destination for FinTech in Europe. In 2023, the UK attracted $5.1bn (equivalent to £4.1bn) across 409 FinTech deals.
Green finance
- In 2023 the UK was the world’s fourth-largest green bond issuer. The UK issuance of green bonds—by far the largest segment of green finance—grew from £2.9bn (equivalent to $3.8bn) in 2018 to £26.3bn (equivalent to $32.7bn) in 2023.
- There were 488 active sustainable bonds listed on the LSE from over 125 issuers by the end of 2023, which have raised around £218bn ($271bn).
Islamic finance
- UK based Islamic banks’ assets represent more than 90% of Islamic banking assets in Europe (excluding Turkey).
ENDS
[1] The London Market is a separate part of the UK insurance and reinsurance sector, based in central London. It consists mostly of general insurance and reinsurance and predominantly involves high-exposure risks. It is the largest global hub for commercial and specialty risk, with 350 insurance businesses employing nearly 60,000 people across the UK.