Sadiq Khan has warned MPs that London’s financial sector faces “catastrophe” if the UK leaves the EU without any sort of deal on future trade relations. His comment is a reminder of how important banking, other financial services and related professional expertise are to the capital’s economy.
A recent report by TheCityUK, a membership organisation that lobbies for the financial sector, estimates that 751,000 people are currently in jobs across the sector in London as a whole.
Of these, 363,000 – just under half – are in financial services jobs and 388,000 are in related professional services occupations.
Within financial services, 148,000 are in banking, 76,000 are in insurance, 31,000 are in fund management and 108,000 in other roles.
Within professional services, 107,000 are in accountancy, 181,000 are in management consulting and 100,000 are in legal services.
The 751,000 represent a very significant 14.9% of London’s total employment and the number has been going up – two years ago, TheCityUK put the total at 729,000, itself an increase on the previous year.
In economic terms, the output of that 14.9% represents a very hefty 21.4% of London’s economic output (measured as GVA), according to TheCityUK. They put the figure at nearly nearly £8b a year.
The report also tells us that “there are more head offices of banks in London than in any other place in the world” and “over 250 foreign banks with an office in London”. This tops the city’s nearest rivals, New York, Paris and Frankfurt.
Such statistics help explain why the Mayor is so intent on speaking up for the needs of London’s financial sector in the context of Brexit. With many companies already putting together plans for potentially moving jobs elsewhere, it has become a big part of his task of trying to save London from the worst consequences of the vote to Leave.
The report from TheCityUK is here. The section on London is on pages 26 and 27.