The stormy economic outlook overseas creates an opportunity for the UK to act as a safe harbour for investment, writes City of London Corporation policy chairman Chris Hayward
The Chancellor has taken some necessary steps to shore up the nation’s finances, and in recent weeks major investment moves, from the Lower Thames Crossing to the ongoing work around the £70bn National Wealth Fund, signal serious backing for infrastructure investment. We welcome it. But now’s the time to go further.
The stormy economic outlook overseas creates an opportunity for the UK to act as a safe harbour for international investment.
The City remains the engine room of the UK economy, fuelled by inward investment driving sorely-needed productivity growth in London and beyond. But we must do more. And the government’s recent announcement that HM Treasury and the Office for Investment will work in partnership with the City Corporation to create a concierge service for foreign direct investment is to be greatly welcomed.
To grow, to compete and to lead globally, the UK’s financial and professional services (FPS) sector needs two things: strong foundations at home, and ambition abroad.
At home, that means economic growth, regulatory predictability and the right skills pipeline. Abroad, it means getting on planes, banging the drum for Britain and securing market access for the sectors driving our economy.
There are immediate opportunities on the table, quick wins that will bring real benefits to businesses on both sides of the trade relationship.
Next week, I’ll be in Switzerland to champion the UK’s world-leading financial and professional services sector (FPS) sector and support the implementation of the Bern Financial Services Agreement (BFSA), the world’s first deal of its kind.
The UK and Switzerland host Europe’s two largest financial centres, whilst being in Europe but outside the EU. Our trade is worth nearly £46bn, half of which is in services. The BFSA sets a new paradigm, one that could become the blueprint for future UK deals.
We’re working with firms to make sure they’re ready to take full advantage.
Negotiations on an enhanced free trade agreement (FTA) between our countries must also tackle critical cross-cutting issues, such as mobility, digital trade and data flows. An aligned FTA and Bern Agreement would streamline processes, unlock new markets and boost jobs and growth in both nations.
My next visit will be to New York, Washington DC and Chicago. The UK and US are natural partners, home to the world’s two leading financial centres. Yet there is more we can do.
In an ideal world, we’d see mutual recognition of financial services and an expanded US-UK Data Bridge. However, trade talks take time. In the meantime, we’re pushing for deeper regulatory dialogue, enhanced technical cooperation and practical tools for innovation.
We’ve seen results before, the UK-US Data Bridge in 2022, joint coordination on financial stability during the Credit Suisse and Silicon Valley Bank crises, and the 2018 Covered Agreement on insurance. Let’s build on that.
Looking ahead to our ongoing EU engagement, when I will visit Luxembourg and Brussels, we recognise that a positive, constructive and forward-looking relationship will be beneficial to both sides.
We welcome the continued improvement of EU-UK relations, which have moved into a constructive space that allows for mechanisms such as the UK-EU Financial Regulatory Forum, to progress. Ongoing regulatory dialogue can enhance bilateral trust and combat any fragmentation.
The City of London, as global financial hub, is uniquely positioned to ease access to global capital markets, bridging investment gaps on both sides of the Channel.
The future of financial services, our largest export sector, depends on collaboration – nationally and internationally.
We’ve made progress. But now is the time to move further and faster.
Chris Hayward is policy chairman at the City of London Corporation