The UK has the tools, talent and expertise to unlock growth
In a competitive global environment, Britain has everything it needs to succeed, but there are a few ways the government could help, says Chris Hayward
The Chancellor’s Mansion House speech laid out a bold and detailed vision for the UK’s economy and financial services sector. The message is clear: Britain is not only primed for growth but is best positioned to achieve it. Findings from our new report, State of the Sector: Annual Review of UK Financial Services 2024, reveal that London’s equity market remains a leader in Europe, both in size and momentum.
The financial services sector powers the UK economy, contributing £72bn in exports to GDP last year alone — a figure that could grow further with targeted promotion, closer EU ties and new trade routes for financial services. London’s strength as a capital-raising hub was also underscored in our report: the London Stock Exchange raised over £17bn last year, outpacing Paris (£10bn) and Frankfurt (£8bn). This funding supports growth, innovation and hiring, keeping London an international business magnet.
A competitive landscape
However, the global landscape is competitive; the UK ranks fifth, trailing behind the US, China, Japan, and India. Clearly, there is room for improvement. The recent reforms have been promising— changes to the Financial Conduct Authority’s prospectus regime, for instance, have reduced market friction and made the UK more attractive to investors, positioning it as a prime venue for international listings.
The upcoming industrial strategy offers an opportunity to amplify the sector’s impact, bolstering skills and productivity nationwide. But the report also highlights several immediate actions to sustain the sector’s competitive edge. First, UK investors should increase support for ‘scale-up‘ companies. While US firms in this growth stage enjoy access to investment pools up to £100m, the UK currently lacks such scale, risking a loss of talent and business overseas.
Second, a high-profile, government-led campaign promoting the financial and professional services sectors could further attract global investment. The establishment of a dedicated minister for inward investment and an enhanced office for investment are positive first steps, but more coordinated efforts are needed.
Finally, transition finance presents a significant growth opportunity. The Chancellor’s acceptance of the Transition Finance Market Review recommendations aligns with the UK’s clean energy mission, supporting its position as a global hub for green finance. Fresh from COP, where I advocated for UK leadership in green finance, we also welcomed new principles on voluntary carbon and nature markets. These steps advance Article 6 of the Paris Agreement and help keep the 1.5°C target within reach. A public-private partnership will be essential in implementing these initiatives as we push toward net zero.
The UK has the tools, talent, and expertise to unlock the sector’s full potential, driving job creation and growth nationwide. Now is the time to act.
Chris Hayward is policy chairman at Canada Corporation