London closes in on New York as top financial hub but risks remain
London has edged closer to becoming the world’s top financial centre, fresh research shows, but concerns have been raised over the City’s future competitiveness.
The 37th edition of Z/Yen Group’s Global Financial Centres Index (GFCI 37) showed London maintained its second-place ranking amongst the world’s top financial centres, whilst climbing 12 points from its last rating in September.
New York topped the table yet again, but its lead over London has narrowed.
London dominates the European rankings, with a 19 point lead over Frankfurt which missed out on a spot in the top ten, ranking eleventh globally.
The capital was in the top three centres for all eight major industries and scored first for banking.
Elsewhere, in fintech London was chomping at the heels of the Big Apple, reducing the gap between first and second place to a singular point.
London’s competitive outlook divided
The survey also questioned respondents on their home centre prospects, with London ranking as one of the top centres anticipated to become more competitive.
However, concerns exist over risks to London’s future status, given that business confidence has taken a hit since the Chancellor’s Autumn Budget.
The latest release from the Office for National Statistics showed the economy shrunk 0.1 per cent in January, in another blow to growth prospects.
Reeves had pledged to unlock growth across the country, which has included the launch of a National Wealth Fund and slashing regulation.
London market’s woes have continued into 2025, after 2024 saw the largest outflow of listed companies since the global financial crisis, according to data from auditing giant EY. In total, 88 companies moved out of the market last year, compared to just 18 new listings.
Middle East and Asia dominate future prospects
London ranked 12th on a sub survey focusing on future prospects, with only 17 respondents mentioning the City as a centre they consider likely to grow in significance over the next two to three years.
The Middle East and Asia dominated the top 15, with seven of the centres in the Asia/Pacific region and six in the Middle East and Africa.
Dubai scored first with 63 mentions and Seoul second at 48.
Professor Michael Mainelli, chairman of Z/Yen and former Lord Mayor of London, said: “Confidence in leading international financial centres remains strong, with a high degree of stability in rankings.
However, Mainelli noted the index period of the report falls outside of the new US administration, which has triggered a period of economic uncertainty.
“A slowdown in US centres may indicate some projected decoupling from global markets,” Mainelli added.
The GFCI generates ratings through a combination of survey respondents and a statistical model.
GFCI 37 used 140 instrumental factors combined with 31,314 survey assessments of financial centres and 4,946 respondents to an online questionnaire for the research.