TheCityUK’s latest UK Competiveness Tracker showed a downturn during the third quarter of 2012 with ten indicators falling and six rising. The general picture is that many indicators remain at a low ebb, including credit availability to non-financial businesses; turnover of UK equities; mergers and acquisition activity in Europe; and derivatives turnover at NYSE Liffe. New job vacancies in financial services have also fallen to a low point, and while FSA authorisations of people and firms picked up slightly during the quarter they remain well down on five years ago.
Some positive pointers include a rise in London’s rating in the Global Financial Centres Index (GFCI) between March and September, while in the City of London prime rents rose in Q3 for the first time in two years. The UK’s financial services trade surplus was up slightly in the first half of the year at £23bn (compared with the first half of 2011). On broader indicators the UK continues to rank highly (unchanged in 7th place) in the latest World Bank annual assessment of Ease of Doing Business.
Evidence of tentative recovery in the UK and a weaker economic outlook for much of Europe could result in a mixed picture for Q4 with the number of indicators rising and falling likely to be close to balancing out.
TheCityUK’s UK Competitiveness Tracker is a comprehensive summary of the factors that influence the competitiveness of UK financial services and impact on the location of financial services firms in the UK. Findings from a separate TheCityUK report* published last week showed an amber warning light flashing over the attractiveness of the UK as a place to setup and grow a financial services business and reflects this challenging environment. This research, which tracked actual location decisions made between 2006 and 2012, showed that 56% (83 out of 147) of global financial firms’ decisions resulted in a negative outcome for the UK.
*Driving competitiveness: Securing the UK’s position as the location of choice for financial and related professional services.
Both of TheCityUK reports can be downloaded at www.thecityuk.com.
