The world’s booming middle class still holds the key to the City’s future

Billions of people have escaped poverty over recent decades, in what is arguably humanity's greatest success story.

Figures last autumn, moreover, estimated that five people join the world's burgeoning middle class every second.

Much of the success is concentrated in Asia, a picture that looks set to continue according to fresh data published by PwC this morning. The accountancy giant's beancounters forecast massive real wage growth between now and 2040, with India leading the way with an astonishing 222 per cent expected jump in dollar-terms real wages, followed by Malaysia (184 per cent), Indonesia (176 per cent) and China (145 per cent).

The numbers will come as little surprise to the business world, in which many sectors have been positioned eastwards for some time now. Nonetheless, they are a reminder of the inevitable (and welcome) narrowing of the gap between emerging and advanced economies. French wages are expected to rise merely 21 per cent between now and 2040; US wages, just 22 per cent.

It was heartening, therefore, to hear one of Westminster's current protagonists – chancellor Philip Hammond – acknowledge the changing shape of the world during his speech at a Square Mile dinner last week.

"Emerging and developing economies together are home to 85 per cent of the global population and 90 per cent of people under 30 and their economies already account for nearly 60 per cent of global economic activity," Hammond told TheCityUK lobby group.

"But they account for just 10 per cent of the global financial system. So, as savings accumulate and the new middle class grows exponentially there is an enormous opportunity for the City."

With its time zone, language, rule of law, vast depth of expertise and broad ecosystem of financial and related professional services, London is perfectly positioned to take advantage of not only the Asian revolution, but growth stories across the globe in the coming decades.

Visionary financier Tidjane Thiam told a business audience five years ago that just as the current period is known as the Asian century, "I am happy to go on the record and say that the 22nd century will be the African century."

Thiam added: "This [London] is a very good place from which to take on the possibilities and opportunities of the changing world."

His words ring as true today as they did at the time. And that is one reason, at least, to see past the current political and economic headwinds and be confident about the City's future.