Financial Centres: Toronto, Frankfurt rising – London still leading
Adam Breeze : Manchester, UK : 12 September 2017
I’m not one for banning things. Especially not words and phrases. But can we please stop adding “Despite Brexit” to every single positive headline relating to the UK.
“New inward investment creates 300 jobs, despite Brexit”, “UK one of the top 5 economies in the world, despite Brexit”, “Chris Froome wins the Tour de France, despite Brexit”… you get the idea!
So the annual financial centres rankings produced this week show that London is still the leading global centre (despite you-know-what). This doesn’t mean that Brexit is good; nor does it mean that it’s bad; it just means that London continues to have the extremely strong fundamentals, talent, infrastructure and connectivity that appeals to the financial sector.
What it does show though, is that the vast majority of leading financial centres lie outside of the European Union. Only two EU centres, Frankfurt (11th) and Luxembourg (14th), make the top 25 – while three non-EU centres, London (1st), Zurich (9th) and Geneva (15th), are in there ahead of Paris, Amsterdam and Dublin.
Not only is London still leading, the gap between the UK capital and its nearest challenger, New York, has actually widened considerably; not what many observers expected perhaps.
Beyond London’s global leadership, there are a number of centres on the rise – Shanghai, Toronto and Frankfurt have all moved up the rankings, which are increasingly dominated by North American and Asian cities. Centres in Canada and Australia now account for 5 of the top 17 places, which bodes well for the UK’s future free trade pacts.
In addition to London, the British dependencies and overseas territories of Cayman Islands, British Virgin Islands (although the awful Hurricane Irma has sadly devastated the BVI this week), Jersey and Guernsey all rank highly and continue to offer specialist international financial expertise. In the Middle East, Dubai and Abu Dhabi take top spots and Bahrain is another riser.
Interestingly, the biggest falls in ratings were Chicago, Washington DC and New York, along with poor scores for other US cities, largely attributed to fears over the US administration’s future trade policies.
The key to success for any global financial centre lies in a mix of location factors which are detailed in the report and shown below:
These areas of competitiveness are useful reminders for all inward investment teams and those wishing to see their city rise up the league table. In each of the five headline areas – Business Environment, Human Capital, Infrastructure, Financial Sector Development and Reputation – London is a clear winner at the moment. Whether it stays at the top depends on many global economic and political factors… including you-know-what!