Top finance managers skeptical about London’s future
London may surrender its lead as one of the world’s finance capitals, a status it shares with New York, according to a majority of executives at corporate majors polled by Lloyds Bank.
The bank’s financial institutions sentiment survey showed that 64% of sector leaders think that the City of London will stagnate as a global hub compared to its rivals, business-focused newspaper City A.M. reported earlier this week.
The City of London, widely referred to simply as the City, is a historic financial district and home to both the London Stock Exchange and the Bank of England.
“The City of London’s status as a leading financial centre is at an inflection point,” Lisa Francis, managing director at Lloyds Bank Corporate and Institutional Banking, told the newspaper.
The district has reportedly faced something of a crisis in confidence. Several firms have steadily abandoned London’s listed markets, opting for other major stock exchanges. UK chip designer Arm successfully debuted on New York’s Nasdaq stock exchange after the British government failed to persuade the tech firm to list in the UK.
A quarter of companies surveyed by the bank say they would prefer to relocate some of their UK-based staff overseas if London loses its status as one of the world’s leading finance hubs in the next five years.
“A number of factors, including political uncertainty, Brexit and increased international competition, mean that we cannot be complacent that it will always be at the very top,” said David Gauke, head of public policy at Macfarlanes and a former treasury minister, as cited by the media.
In December, Chancellor Jeremy Hunt announced a package of reforms known as the Edinburgh reforms in response to the concerns. The measures are meant to “unlock investment and turbocharge growth” by repealing “burdensome pieces of retained EU law.”
So far, the UK government has passed the flagship Financial Services and Markets Bill that authorizes local regulators to make decisions previously made at an EU-wide level.
Some 80% of respondents said better relations between the UK and EU would help enhance London’s status. Two-fifths said there should be a relaxation of immigration rules for skilled workers.
“The UK needs to demonstrate that we are committed to being an open economy, willing to attract talent and investment here, prepared to embrace innovation but also capable of providing political and regulatory stability,” Gauke said.
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