Financial services firms account for 9.6 per cent of the UK’s GDP

CITY FIRMS defied a harsh economic climate to up their contribution to UK GDP in 2011, according to data out yesterday.

Financial services accounted for 9.6 per cent of the UK’s national output in 2011, TheCityUK said yesterday, up from 9.4 per cent in 2010. Together with the 4.9 per cent of GDP contributed by professional services in both years, the sectors make up around 14.5 per cent of the UK’s GDP, despite only employing around seven per cent of the country’s workers.

Of these 2,058,500 employees, some 663,600 are stationed in London, making up 15 per cent of the capital’s total employment. These 663,600 workers add an average of £120,554.55 each to GDP.

After London comes Manchester, employing 50,200, Edinburgh, with 49,200, and in fourth Birmingham, where 49,200 workers are employed in financial or professional services.

And as well as generating output and employment, financial and professional services are churning out cash for the exchequer, TheCityUK says.

The City pumped £63bn into the government’s coffers in the 2011-12 tax year, maintaining its input in spite of the slide back into double-dip recession – though strong revenues elsewhere meant this was a reduced fraction of the total – 11.6 per cent instead of 12.1 per cent.

Of this £63bn total, £21.4bn came from financial services employees’ income tax payments, together making up some 15 per cent of income tax revenues – despite coming from just four per cent of the UK’s workers.