With London continuing to hold the top spot as the world?s most important international financial centre, ahead of New York City, the financial sector services have emerged as the largest exporting item for the UK.
While New York sources a large volume of business from its domestic market, London has the largest share of international financial markets. In fact banking has been the single largest contributor to the UK export basket, with net exports totalling ?12.2 billion, followed by insurance with ?3.5 billion and securities dealing with ?3 billion.
The financial sector is also the largest contributor to the UK?s balance of payments and the major contributor to GDP and employment. Within the UK, the importance of London is core to its international position but other cities such as Edinburgh, Glasgow, Leeds, Manchester, Birmingham and Bristol are also emerging as important financial centres.
In all segments, including cross border lending, foreign equities turn over, foreign exchange turnover, exchange traded derivatives turnover, over-the-counter derivatives turnover, marine insurance net premium income, international bonds, fund management, hedge funds, private equity and IPO, London holds the largest share.
Financial services share of GDP has risen strongly in recent years to reach 9.4% in 2006 from 5.5% in 2001. Professional services closely connected with the financial sector, namely accounting services, legal services and management consultancy have added a further 3.6%.
The robustness of international business undertaken by financial organisations operating in the UK continues to be demonstrated by their financial services trade surplus, totalling ?25.1 billion in 2006.
There were 1,07 million people employed in the UK financial services in 2006 up 7,000 from the previous year while 3,06,000 employed in the City of London at the end of 2005, including 1,35,000 in financial services.
A recent global survey has found that London has shot up 21 points in the ranking compared with the 9-point increase for New York. The survey has also said that international financial centres, where global institutions will be attracted within next two to three years are Dubai, Singapore, Shanghai, Mumbai and Beijing.