London cannot afford to sleepwalk through the next decade
London is slipping into complacency. We must use the next decade to reassert ourselves as a premier financial centre, writes Aster Crawshaw
There is a confidence that comes from long-term success, but confidence can too easily lead to complacency. London and New York compete each year to be named the world’s leading financial centre, but will London be competing for the crown in 2036? The world is not standing still. Neither can we.
In researching a new report on the City’s future, experts we spoke to were unanimous that London has what it needs to thrive. A broad and deep financial and advisory ecosystem, access to a global talent pool, trusted legal and regulatory systems, and a thirst for innovation. Yet I keep returning to a warning one contributor gave us: competitive advantages can erode and business flows are fickle.
None of what follows should be read as pessimism. Quite the opposite. The next decade could be the most consequential in the City’s modern history, and one of real opportunity. But opportunity is not the same as inevitability. Our conversations with senior leaders across finance, government and industry left me convinced that we must drive home our advantages with urgency and rigour.
Born in the UK, floated in the US
Start with capital. Britain has no shortage of world-class innovation. Some of the best fintech ideas anywhere in the world are being developed here. What we lack is the domestic conviction to back them at scale.
UK pension funds and wealth managers invest the bulk of their capital overseas, even as our own scale-ups look for growth funding. As one contributor memorably put it: the next trillion-pound company may be born in the UK, but if we don’t nurture it, it will float in the US.
Recent reforms to listings and prospectus rules are already showing results. But process alone won’t fix the bigger question of where British capital chooses to go. If we want London to be the natural home for British and international growth companies, we need to incentivise domestic investment, create an attractive fiscal environment for entrepreneurs and make it easier for the world’s best minds to come to the UK.
Then there is regulation. The UK has built one of the most trusted, internationally respected regulatory frameworks in the world. That is a strategic asset and none of the leaders we spoke to want to see it dismantled. But they do want change: a more risk based approach, faster decision making and proportionate regimes for AI, tokenisation and digital settlement. We will lose ground to competitor centres if we don’t act now.
London’s PR problem
There is also a subtler challenge: how London tells its own story. It is easy to frame the City’s interests as separate from, or even at odds with, the rest of the country. Our research – and our experience as a law firm with strength across the UK’s regions – shows the opposite. When financial markets reconnect with British industry – defence, clean energy, life sciences, advanced manufacturing – the benefits spread well beyond London. As one leader put it to us: if the British economy does better, UK financial services does better, and vice versa.
That is not simply a PR problem for the Square Mile. It is a shared challenge for policymakers and business, because public and political support for pro-growth policies depend on people understanding the value the City brings to everyone in Britain.
London can muddle through, gradually ceding ground to competitor centres that move faster and court capital more aggressively. Or it can use the next decade to reassert itself decisively as the location where AI-driven financial services scale fastest, where digital assets are regulated with confidence and speed, and where British capital finally backs British ambition.
The difference between those two futures will not be decided by chance. It will be decided by the choices made by investors, particularly pension trustees, by regulators, by government and by firms like ours. The ambition clearly exists. What matters now is whether we act on it quickly enough.
Aster Crawshaw is senior partner at Addleshaw Goddard, the London-headquartered international law firm