By Sinead Cruise
LONDON (Reuters) – London is gaining ground on New York in a closely-watched index of the world’s leading financial centres, in a first sign that efforts by policymakers to reboot Britain’s sluggish banking and investment industry have started to bear fruit.
The U.S. city has held the top position in think tank Z/Yen’s Global Financial Centres Index since September 2018 but London closed the gap to just seven points after rising 12 points in the 37th publication of the survey published on Thursday.
The GFCI 37 index was compiled using quantitative measures provided by third parties including the World Bank, United Nations and the OECD and 4,946 responses to the GFCI online questionnaire from industry participants.
Hong Kong retained third position ahead of Singapore, while San Francisco, Chicago, Los Angeles, Shanghai, and Shenzhen were also unchanged in fifth to ninth positions.
Seoul re-entered the top 10 centres in this edition of the index and in the top 20 rankings, Dubai rose four places to 12th position and Amsterdam rose nine places to 18th.
The UK financial industry is grappling with continued challenges to its status as the world’s second-largest financial hub, after losing unfettered access to the European Union’s single market in the wake of Brexit.
The Financial Conduct Authority and the Prudential Regulation Authority are consulting on growth-focused reforms to boost Britain’s competitiveness, while Chancellor Rachel Reeves has called for a more balanced approach to risk.
But the index showed that U.S. financial centres posted the lowest average improvement across the world’s regions, suggesting confidence in U.S. financial services’ performance may be waning.
Federal Reserve Chair Jerome Powell said on Wednesday that trade tariffs imposed by President Donald Trump could delay efforts to curb inflation this year.
The Fed left rates unchanged but testy geopolitics, trade wars and recession fears have already dampened dealmaking activity on both sides of the Atlantic.
“Confidence in leading international financial centres remains strong, with a high degree of stability in the rankings. That said, the index period of GFCI 37 falls outside the new U.S. administration,” Professor Michael Mainelli, chairman of Z/Yen, said, pointing to the uncertainty.
New York, San Francisco, Chicago, and Los Angeles remain in the world’s top 10, with Washington D.C. and Boston also in the top 20. On average, ratings for centres in this region rose 1.41%, compared with an average ratings increase across all centres of just over 2%.
(Reporting By Sinead Cruise)
