CITY KEEPS EUROPEAN FINANCE LEAD (...YES, DESPITE BREXIT)

JACK BARNETT

LONDON is beating away the dire warnings that Brexit would knock it off its perch as Europe’s top finance hive and is even drawing in more investors amid high inflation and interest rates, a new report out today unveils.

Some had bet that the UK’s decision to leave the European Union (EU) would trigger a flight of jobs, investment and innovation to the continent, but research by EY suggests the global finance community has yet to sour on the country.

In fact, the UK has topped the consultancy’s finance foreign direct investment table every year since the 2016 Brexit vote and since the research started. Similarly, London has led the European city table since it was first constructed in 1986.

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“Investors recognise the strength, gold-standard governance and resilience of the UK’s financial system and see it as the preferred destination for growth, innovation and access to top talent,” Anna Anthony, UK financial services managing partner at EY, said.

Foreign investors pumped cash into 46 financial services projects in the capital last year, up from 39 in 2021.

That rise pulled the Square Mile away from its continental rivals. Paris drew in outside investment for 35 finance proposals, down from 38. Madrid and Milan were third and fourth.

“London continues to lead Europe in attracting foreign direct investment in financial services, and the sector is proving resilient despite the global challenges facing the UK economy,”

Chris Hayward, policy chairman at the City of London Corporation, told City A.M.

“That is good news for every household, because a strong City creates the wealth and jobs that support the economy and fund our public services,” he added.

Overall, the UK attracted foreign investors to 76 financial services projects last year, up 13 from 2021, putting the country ahead of France by 31, which recorded 15 fewer projects compared to 2021.

The City minister Andrew Griffith welcomed the figures as he and Treasury ministers plot reforms to the financial services sector which it says will make it more innovative.

Some of the impacts of Brexit are still yet to become clear. The UK is home to the majority of Euro-based clearing, the future of which is uncertain, with the EU demanding most or all of it is ‘reshored’ to the continent by 2025.

JAMES SILVER

GET ready for the annual office battles over the temperature of the air conditioning: the summer, it appears, is finally here.

The temperature is set to stay above 20 celsius all week, with the Square Mile’s restaurants, pubs and bars hoping for bumper lunchtime and post-work trade after a quiet halfterm week.