Belfast Telegraph

UK’s finance industry warned Brexit could threaten global crown

Britain’s total financial trade surplus in 2016 was more than its next closest rivals – the US and Switzerland – combined.

Britain has retained its crown as the world’s leading financial centre in 2017, but a leading City lobby group says the UK’s position should not be taken for granted in light of emerging Brexit risks.

A new report by TheCityUK says that Britain topped the charts with a total financial trade surplus of 77 billion US dollars (£69 billion) last year, which was more than its next closest rivals – the US and Switzerland – combined, at 41 billion dollars (£30.6 billion) and 22 billion dollars (£16 billion), respectively.

The UK has also continued to dominate in foreign exchange trading, accounting for 37% of global market share, and stands as the number one location for cross-border bank lending accounting for 16% of the international value, the report explained.

International insurance premium income was also at the top end, with the UK at around 6%.

But Brexit could put Britain’s position in jeopardy.

Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “The UK’s place in the global financial system is unparalleled. London’s only real rival as a full-spectrum, truly global centre is New York.

“However, we cannot take this position for granted.

“Brexit is likely to create some economic friction with our largest trading partner – the EU – and with an increasing number of regional and specialist centres arising in Asia and elsewhere – it is vital that the UK seek new trading and investment opportunities.”

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Brexit

The report comes as the Government works to enter into the next phase of Brexit talks which are set to cover a potential transition period and future trade deal with the EU – just as a number of businesses get ready to push the buttons on Brexit contingency plans.

It has pushed bodies like the influential Treasury Select Committee to call for a simple transition deal proposal that could be negotiated in a matter of weeks.

Without a mutual recognition deal that replaces the EU’s passporting rights – which give financial services cross-border access across the bloc – or a raft of international deals to counter a ‘no-deal’ scenario, there are fears that one of Britain’s largest industries could diminish.

Currently, the UK hosts the largest pot of banking assets in Europe at eight trillion US dollars (£5.9 trillion), as well as a record 11 trillion dollars (£8.1 trillion) in assets under management.

Net exports from its accounting services totalled 1.6 billion dollars (£1.2 billion) last year, while the value of international bonds in the UK was at 2.9 trillion dollars (£2.14 trillion) – the highest international total.

That is on top of the average 24.3 billion dollars (£18 billion) of gold and three billion dollars (£2 billion) of silver which is traded every day at the London Bullion Market Association.

Britain also lays claim to 7% of global revenue from legal services, between 580 billion dollars and 640 billion dollars (£428 billion to £472 billion).

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