With a trade surplus of £92.2bn, the UK remains the largest net exporter of financial services globally – larger than Singapore, Switzerland and Luxembourg combined, new analysis by the City of London Corporation shows.
New figures by the ONS show a £11.3bn rise in UK financial services net exports in 2023 – up 14%. According to the data, the increase was largely driven by a rise in exports to the US which saw the largest absolute increase to any one country (£5.7bn).
The figures come as the Government consults on its new financial services strategy. The City of London Corporation has urged the Government to ensure the strategy prioritises services trade, preserves the UK’s open and global nature and promotes this abroad.
Through the UK’s global financial services trade, there is an opportunity to shape regulatory standards and support the work of international bodies, reducing the cost of doing business and increasing the capacity for innovation. This is particularly important against the current backdrop of global regulatory fragmentation which makes cross-border trade more difficult.
In 2023 UK exports of financial services grew for the 4th year running, reaching a new record high of £120.3bn. This increase of £16.8bn (16%), was driven by both financial service (+£11.1bn) and insurance activities (+£5.8bn).
Further finding shows the US remains the largest export market for UK financial services, with exports reaching £39.8bn in 2023. This represents 33% of all UK exports of financial services to the world.
The US overtook the EU as the largest export market for UK financial services in 2021 and onwards. That said, exports to the EU have continued to rise. In 2023 they increased by £7.4bn year on year (25%), underscoring that despite Brexit, the UK remains a key supplier of financial services to the block.
The top 5 markets for UK FS exports in 2023 were the US (£39.8bn worth of exports), Germany (£6.5bn), Ireland, (£6.5bn), Luxembourg (£6.3bn), and France (£5.2bn).
Among emerging economies, demand for UK financial services is also growing fast. Brazil saw exports jump by 80% YoY in 2023 while exports to India rose by 40%. While export growth to China stood at 8% YoY in 2023, it is by far the largest export market across emerging economies, worth £1.9bn in 2023. Exports to China surged by 153% between 2019 and 2023.
Policy Chairman of the City of London Corporation, Chris Hayward, said, “We welcome these findings – it is encouraging that the UK remains the leading net exporter of financial services despite significantly challenging economic headwinds in the last few years.
“These findings highlight the unwavering strength of London’s financial services hub and the UK-wide sector. It is critical now that as the Government develops its financial services strategy, barriers to trade are addressed and a robust plan advanced to ensure the UK remains open to global businesses seeking our expertise.
“We must continue to liberalise services trade, and through the bolstered Investment Office, hone our ‘concierge’ service for international firms investing in the UK.”
