Monday, May 20, 2024, 6:00 AM
Labour’s comments are broadly in line with the Conservative pledge in its manifesto to “ensure that Basel III capital requirements do not hinder lending to small businesses”.
The UK has extended its lead as Europe’s top investment destination for financial services, despite the impact of Brexit, according to new research from EY.
The UK attracted 108 financial services projects last year, up from 76 in 2022, putting it well ahead of its European rivals. France, in second place, secured just 39 foreign direct investment (FDI) projects for 2023.
This means the UK now accounts for a third of European FDI projects focused on financial services, up from 26% in 2022. France and Germany are in joint second place with 12% each.
Read more City leaders: We must embrace risk to stay competitive
“The UK not only maintained its lead as Europe’s most attractive financial services market last year, but significantly expanded its position,” Anna Anthony, EY UK financial services managing partner, commented.
“Despite challenging macroeconomic conditions and geopolitical uncertainty, foreign investor confidence remains strong due to the stability of the UK’s financial services sector.”
The United States continues to be the largest source of investment in financial services in Europe, accounting for 28% of all FDI projects, the highest percentage of U.S.-backed projects in the past decade.
London attracted the majority of foreign investment, securing 81 projects for 2023, a massive 76% increase on last year and more than double the level of Paris.
These figures show that London remains Europe’s leading financial hub, despite concerns that it may lose status as a result of Britain’s departure from the EU.
But the City is likely to face a stiff challenge in the coming years from Paris, which investors have rated above London as the most attractive European city for financial investment over a three-year period.
“Competition is fierce,” Anthony said. “Improving the attractiveness of the market must be a top priority for both industry and government.”
Maintaining the city’s international competitiveness is a major goal for the government.
In late 2022, the government will launch the Edinburgh Reforms, which aim to revitalise London as a financial centre. A series of consultations on different parts of the UK’s financial infrastructure have also been launched.
Among the most significant measures was the introduction of a new secondary power for financial regulators to take international competitiveness into account when making regulatory decisions.
Investment Secretary Lord Johnson said: “The UK is at the heart of investment in financial services across Europe and this is an unprecedented vote of confidence in our country’s excellent position.”
“I’m pleased that with the strong investor confidence that these fantastic results have been matched, we are now undoubtedly a financial services powerhouse,” Johnson continued.
Read more: ‘A failure?’ Edinburgh reforms criticised by MPs, Treasury hits back
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