US uncertainty has seen London cement its position over New York at the top of the Global Financial Centres Index rankings, but Frankfurt, Dublin and Paris are waiting to capitalise on Brexit doubts
London has retained its position as the world’s foremost financial centre, cementing its lead over New York, according to a report published on September 11. The latest edition of Z/Yen Group’s Global Financial Centres Index placed the UK capital 24 points ahead of its US rival.
The gap between the two financial powerhouses is actually the largest since the index began in 2007. This has come as something as a surprise to many analysts, who predicted that uncertainty caused by last year’s Brexit vote would undermine London’s position as a financial hub.
With London’s overall rating declining by two points when compared with last year’s survey, the fact that it retained top spot says as much about US economic anxieties as it does UK resilience. New York saw its rating fall 24 points year-on-year, with investors and businesses showing concern over President Trump’s isolationist economic policies.
The index cited London’s business environment, infrastructure and human capital as some of its main strengths, but there were a number of warning signs that should help offset any growing complacency. Frankfurt, Paris and Dublin – three cities that are waiting to capitalise on any sign of post-Brexit weakness – all saw their position in the rankings increase.
Following the report’s publication, TheCityUK noted that London’s long-term position at the top of the pile still relies heavily on the outcome of ongoing Brexit negotiations. “Many firms have already started to activate their contingency plans and others will undoubtedly follow suit if these aren’t confirmed as soon as possible – and by the end of this year at the very latest,” said Miles Celic, CEO of the financial lobby group.
Among all the lingering uncertainty, one thing is assured: London cannot simply rely on the insecurity of other financial centres to prop up its position on the world stage. Issues of trade and employment rights must be resolved quickly if the UK capital is not to be overtaken by European competitors.