UK financial services 'pillar of strength'

The critical importance of financial and related professional services to the UK economy has been highlighted in the annual 'UK Key Facts' report by the sector's lobby group, TheCityUK.

David Sapsted

9 April 2020

Published on Thursday, the report shows that the industry remains a major national employer, with one in 14 UK-based workers - more than 2.3 million people - now employed in financial and related professional services, two-thirds of them outside London.The report also points out that the sector is a major source of tax receipts, accounting for £10.50 in every £100 of tax paid to the exchequer: a total of £75.5 billion in the 2018-19 financial year.And across its domestic and international activity, financial and related professional services firms contributed £200.5 billion to UK gross value added (GVA), representing £10 in every £100 of UK economic output.Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “We cannot yet know the full long-term impact Covid-19 will have on the economy, but what is clear is that this industry will be critical to keeping the economy going through this crisis, and essential to supporting the recovery afterwards.“The financial and related professional services industry is a pillar of strength for the UK, making a substantial contribution to employment, tax receipts, and the balance of payments."It’s not only a vital economic asset, but also makes a real difference to people in their daily lives, helping them save for the future, invest in a business and protect and manage risk."The report states that, in 2018, financial and related professional services generated a trade surplus of £84.1 billion, almost equal to the combined surpluses of the industry's next two leading countries: the US and Switzerland. The sector's trade surplus in 2018 was more than all other UK net exporting industries combined."The industry is often the face of British business across the globe, contributing ‘soft power’ as well as economic and commercial success," said TheCityUK."The UK has one of the largest and most developed markets for professional services, including accounting, management consulting and legal services. These three sectors contributed £21.6 billion, £15.1 billion, and £28.8 billion respectively to UK economic output in 2018."The report also shows that, in recent years, the industry has been making multi-billion pound investments to enable customers and other businesses to take advantage of digital innovations such as internet banking, contactless payments, law tech and the use of AI.