Financial services contributed £281bn to the º£½ÇÊÓƵ economy and provided approximately 2.5m jobs, as per a new industry-led report.
The sector, which plays a crucial role in the Square Mile's business landscape and manages trillions of pounds in assets, has navigated several tumultuous years marked by Brexit negotiations, a pandemic, and tariff upheaval, as reported by .
A fresh report from TheCityº£½ÇÊÓƵ suggests that financial services have emerged as a driving force for º£½ÇÊÓƵ economic growth in the post-Brexit era. The research underscored that financial services' economic output reached £281bn in 2024, enhancing gross value-added, a key metric in calculating º£½ÇÊÓƵ growth figures.
Productivity levels – or output per hour – in financial services are nearly triple that of the entire economy, according to TheCityº£½ÇÊÓƵ. The average output generated by the whole economy was £39.30 an hour in 2023.
Financial services seem to have elevated the º£½ÇÊÓƵ figure beyond what it would have been, given that only seven areas of the economy exceeded the national average compared to numerous sectors producing less each hour.
International investment 'magnet'
As an international investment 'magnet', º£½ÇÊÓƵ financial services have attracted a cumulative total of £51.2bn in foreign direct investment in the four years leading up to 2024, largely due to a surge in 2020.
Anjalika Bardalai, chief economist at industry group TheCityº£½ÇÊÓƵ, highlighted that financial services are a "strong magnet for international investment" and have swiftly adapted to shifts in demand, with an increasing number of consumers seeking technology-assisted decision-making.
"In the midst of domestic and international policy turbulence, acknowledging the industry's broad contribution is crucial for devising strategies that will protect and enhance its competitiveness, ensuring it continues to drive º£½ÇÊÓƵ prosperity," Bardalai stated.
Small and medium-sized enterprises (SMEs) are also drawing significant funds from lenders, accounting for a third of the total £541bn borrowed by businesses as of January 2025.
London provides approximately 900,000 jobs, with an additional 1.6 million workers in financial services and related professions, such as law and management consultancy, distributed across cities like Birmingham and Manchester.
The government heavily relies on the financial services sector for income generation to fund areas like the NHS and defence.
According to the report, tax contributions from this sector amounted to £110.2bn in 2023, although the proportion of total tax receipts has decreased from 14.6 per cent in 2016 to 12.3 per cent two years ago.
