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Boost for post-Brexit Britain as firms focus on the City

·2-min read
City of London
City of London

A majority of global finance firms plan to establish or extend their operations in the UK this year, in a post-Brexit boost for the City.

Nearly 90pc of major financial services firms said they will either seek to set up shop in Britain or boost their current operations, according to a report by EY.

The survey found that investor confidence in the UK financial services sector was at an all-time high, having risen significantly in recent months as pandemic restrictions recede and Brexit fears fail to materialise.

Anna Anthony, head of financial services at EY, said: “It’s encouraging that such a high proportion of global financial services firms are currently looking to grow their business in the UK.

“This is testament to the stability and resilience of the mature UK market which continues to ably withstand the material challenges and uncertainty of both the pandemic and Brexit.”

EY’s report will give the Square Mile a boost after it was stripped of its passporting rights following the UK’s exit from the EU, which gave companies full access to European markets.

Before the 2016 referendum, finance chiefs warned that as many as 232,000 jobs in the City would be lost. However, a mass exodus of finance jobs out of London has failed to materialise.

The EY report also found that sentiment around planned investment into UK financial services has risen significantly in recent months as Britain becomes one of the first countries in Europe to relax pandemic restrictions.

Over half of firms surveyed said a country’s success in addressing the pandemic is the most important factor influencing where they invest.

Other key priorities include safety and security measures put in place to prevent a future major crisis, such as another pandemic or an environmental or cyber crisis.

Ms Anthony added: “The UK has been the top European location – and London the top European city – for foreign direct investment for over twenty years. While confidence levels have fluctuated, this latest investor sentiment survey shows that amid economic downturn and recovery, investors are reassured by the maturity and stability of the UK market.”

A separate report published on Wednesday revealed that Britain’s success in developing Covid-19 vaccines and mutation-tracking kits lured more foreign backers to the UK last year, driving investment in the country's biotechs to record-breaking highs.

Industry chiefs said the UK's industry was entering its "golden age" after figures from the BioIndustry Association (BIA) showed biotech and life sciences companies secured £4.5bn in public and private fundraisings in 2021 - a 60pc spike on the prior year.

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