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TheCityUK’s latest research shows the competitiveness of financial services in the UK continued to improve in Q2 2013, the first time since the end of June 2011 that there have been back-to-back quarterly increases.
The UK Competitiveness Tracker, which reviews the movement of a range of financial services and wider economic indicators, found that in total 11 indicators were up during Q2 2013, while only five were down. Over the twelve months since end June 2012, a total of 10 indicators were up while six were down.
Those indicators showing a positive shift in Q2 2013 include overall volume of financial services business and the sector’s trade surplus, estimated at £13.3bn for the quarter. Other indicators that rose over the quarter include European IPOs (€5.2bn in Q2, up from €3.3bn in Q1), M&A activity (estimated at $100.3bn for Q2), and City office take-up (189,300m2 in Q2, up from 88,100m2 in Q1). While the number of new City job vacancies dropped and financial sector employment decreased over the quarter, employment figures are expected to rise again in Q3.
Chris Cummings, Chief Executive of TheCityUK, commented: “As our Tracker shows, the UK remains one of the most competitive locations in the world for financial services and London is still the number one global financial centre. The recent GDP figures from the ONS and Markit/CIPS services purchasing managers' index show that the UK’s economic recovery is continuing to gather pace. This is leading to increased confidence within the financial sector, and we expect the upwards trend in competitiveness to continue in the third quarter of the year.
“Although employment fell over this quarter, the situation has stabilised and improved since the onset of the financial crisis, with sectors such as retail banking, legal services, accounting and management consulting driving employment growth. It’s also good to see that City office rent is holding up, and despite high levels of office construction the vacancy rate has dropped from 10% between 2008 and 2010 to just under 8% in Q2 2013.”
TheCityUK’s UK Competitiveness Tracker is a comprehensive summary of factors that influence the competitiveness of UK financial services and impact on the location of financial services firms in the UK. The full Tracker report is available on the website: www.thecityuk.com
