London Secures Exclusive Top Position in Global Financial Centre Ranking

In a recent study conducted by the City of London Corporation, London has reclaimed its position as the world’s premier financial center, surpassing its rival, New York. The annual ranking exercise, based on 101 metrics covering indicators such as “reach of financial activity” and “business infrastructure resilience,” placed New York in second position after both cities tied for the top spot last year.

The findings acknowledge that London faced challenges, including a decline in “capital markets activity and assets under management,” with a warning about potential obstacles posed by rising interest rates. Despite a year-on-year decrease in its overall score, London’s relative ranking improved. The city compensated for a 2023 drop in traditional market action by excelling in the “sustainable finance” and “talent and skills” categories.

While New York led in “tech” and “wider financial activity,” the end of the bull market period after Covid impacted its overall score. The City Corporation attributed London’s success to recent regulatory streamlining, including the Edinburgh Reforms and the Financial Services and Markets Act, along with initiatives like the Mansion House Compact targeting tech and life sciences.

Chris Hayward, policy chairman at the City of London Corporation, emphasized the need for ongoing reforms to maintain London’s competitive edge, stating, “We cannot ignore the challenges we face in our capital markets ecosystem. Further reforms are needed.”

The report highlighted London’s resilience, with over 138 start-up firms valued at over $1 billion in the UK, surpassing the combined total of France, Germany, and Singapore. London, home to 104 of these start-ups, outperformed European rivals Frankfurt and Paris, securing its position as a thriving financial hub.

Despite positive indicators such as a 68% increase in foreign direct investment to over £2 billion in 2022 and a reduction in London’s office vacancy rate to 7.3%, challenges remain. The report noted a decline in foreign firms listing shares in the UK compared to an increase in the US, underscoring the importance of ongoing efforts to revitalize London’s stock market.

Professor Michael Mainelli, the Lord Mayor, commented on the report, stating, “Amid a range of macroeconomic and geopolitical challenges, this latest report shows how the UK’s financial services are key to driving growth and promoting the breadth of specialist expertise available in the City.”