The dominance of The City of London and the capital’s reputation as one of the globe’s foremost financial centres has been confirmed with news the city has knocked New York off the top spot and has become the world’s leading financial centre.
The think tank Z/Yen Group which is based in London and focuses on the commercial sector, publishes the Global Financial centres Index (GCFI) for the past eight years twice a year. The Index profiles, rates and ranks 84 financial centres across the world. It draws on two sources of data, instrumental factors, or external indices and responses to an online survey. There are 105 different factors that come into play, with over 28k financial centre assessments and 3,194 financial professionals providing answers.
There are five key definitions that feed into the ranking; business environment, financial sector development, infrastructure, human capital and the reputation of the financial centre.
This year’s latest results, published in September, put London just eight points ahead of New York, with Hong Kong in third place, Singapore in fourth and Tokyo in fifth. Over the past 18 years, the top five cities have battled for supremacy. London and New York have been closely matched almost running in parallel across the past, nearly two decades, with London just edging on top with a drop in London’s ranking a decade ago and another as the city emerges from the financial crash.
London has now retaken the top spot with analysts pointing to a number of key factors. The general election in May has allayed many fears as financial centres don’t like political instability and uncertainty. The Scottish referendum has also contributed to a renewed confidence. The growth in the capital’s technology community, most notably Fintech and the growing links between the digital sector and the financial capital is sponsoring innovation and a growth in ideas, which contributes to confidence.
The only cloud that hangs over London and its position as the world’s financial capital is the European referendum and the uncertainty over London’s place within Europe.
The challenge that now stands for London is to ask how the city needs to stay flexible and adaptable. The ability of a city to be a good home for financial business, to have a good relationship with government, to weather economic storms, to provide a good place for financial experts to live as well as work is vital.
What does it mean for the capital? It suggests that even more financial companies may be looking to move to London or at least benefit from the expertise and fertile ground for both growth and investment. This raises the prospect of an increase in relocation and travel, which inevitably bodes well for Clarendon and the ability to provided extended stay accommodation for companies or individuals looking for somewhere to stay in London for a lengthy period of time, close to traffic infrastructure and also the city itself.
The dominance of London as a world financial centre attracts a great deal of money into the capital, and the rest of the country and is a vital ingredient in London’s continuing attraction as a centre of business.