London Daily

Focus on the big picture.
Thursday, Dec 04, 2025

How is Britain's financial services industry faring after Brexit?

How is Britain's financial services industry faring after Brexit?

It’s an industry that, in 2019, contributed nearly $200 billion to the U.K.’s economy, and supported nearly a million jobs.

Britain’s divorce from the European Union was finalized nearly a year and a half ago, but it’s been just six months since the country’s transition out of the bloc was completed.

A number of 11th-hour discussions took place in December to determine how industries, such as fishing, would operate in a post-Brexit environment. But one large sector almost completely left out of those talks? Financial services.

It’s an industry that, in 2019, contributed nearly $200 billion to the U.K.’s economy, and supported nearly a million jobs. What’s more, financial services exports totaled more than $83 billion, more than three times what it imported.

And that’s the crucial reason the sector was left out of trade negotiations, according to London School of Economics professor Iain Begg.

Below is an edited version of his conversation with the BBC’s Victoria Craig on the global edition of “Marketplace Morning Report.”

Iain Begg: Boris Johnson was very keen to get to a trade deal in the sense of the old-fashioned trade in goods to avoid any tariffs [on financial services]. Tariffs don’t apply to financial services, so it’s outside that negotiation. Also, the whole point of Britain leaving the single market and leaving the [European] Customs Union was to regulate the way we wanted to, and not have to depend on getting an agreement with Brussels. The European side said, “Well, no, if if that’s the way you want to play it, then we can’t agree [on] free access to your financial services exporters.”

Victoria Craig: How concerned do you think the City of London should be — that it should have more deals in place or that it should be working on those deals? Because there doesn’t really seem to be much appetite from the EU side to agree to anything at this point.

Begg: One cynical interpretation is that for the EU, getting some of the activity that’s currently in London is seen as winning a prize. If something migrates to Paris, Frankfurt, Amsterdam or Dublin, then the EU countries in question, are going to benefit from this. So they are a no great hurry to deal with something in which the U.K. is a standout, successful exporter of financial and indeed other business services. But the City is maybe looking outside at the same time, saying, the future is the global marketplace, not so much the EU marketplace so we can tolerate losing a bit of our activity in in the EU, provided we can gain it from the rest of the world.

Craig: We have seen some of that early evidence of other cities trying to court that London business. Reports that French President Emmanuel Macron is going to seriously start courting big financial services companies to move to Paris to make that the financial capital. There’s been sort of a lot of rumblings that perhaps Paris or Frankfurt could take London’s crown. Do you see that happening?

Begg: In a word, no. Paris has been trying to steal the City of London’s crown for the best part of 200 years and has yet to succeed. And in any case, although Macron has been able to offer dinners at the Élysée Palace to putative movers from London, it’s Frankfurt, Amsterdam and Dublin, as well as Luxembourg, which tended to have been more successful in attracting the limited amount of financial services activity that’s moving from London. It’s also worth stressing that where London stands out, apart from having the English language, in this light regulatory regime, is in having a background infrastructure of other business services, which feed into financial services, notably law consultancy and accountancy, and no other European center or president can come close to matching that.

Craig: So even though London may be sort of on its back foot now that we’re into this post-Brexit era, it hasn’t necessarily lost anything. Would you categorize it that way?

Begg: Yes. So far, there’s been a trickle of jobs and certain activities, which are very clearly related to the euro, there has been some movement of asset management. But, overall, it’s it’s relatively limited. And I think that’s why the City remains quite relaxed.

Craig: Do you think there will be a point when the City gets a little bit more concerned? Would it just be if it isn’t able to make deals with other countries, like the U.S., or countries in Asia?

Begg: There’s an element of wait and see to the answer to that question, because we don’t quite know how things are moving, not just on the regulatory front, but in technology. Financial services overall is a very fast moving activity. And we see this all the time with new products being invented, new ways of doing business. The word “fintech” will crop up as a as a way of explaining how things are changing. So at this point, the City thinks it’s nimble enough to be able to cope with what gets thrown at it and isn’t that fearful.

Newsletter

Related Articles

0:00
0:00
Close
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
UK Budget’s New EV Mileage Tax Undercuts Case for Plug-In Hybrids
UK Government Launches National Inquiry into ‘Grooming Gangs’ After US Warning and Rising Public Outcry
Taylor Swift Extends U.K. Chart Reign as ‘The Fate of Ophelia’ Hits Six Weeks at No. 1
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
UK to Raise Online Betting Taxes by £1.1 Billion Under New Budget — Firms Warn of Fallout
Lamine Yamal? The ‘Heir to Messi’ Lost to Barcelona — and the Kingdom Is in a Frenzy
Warner Music Group Drops Suit Against Suno, Launches Licensed AI-Music Deal
HP to Cut up to 6,000 Jobs Globally as It Ramps Up AI Integration
MediaWorld Sold iPad Air for €15 — Then Asked Customers to Return Them or Pay More
UK Prime Minister Sir Keir Starmer Promises ‘Full-Time’ Education for All Children as School Attendance Slips
UK Extends Sugar Tax to Sweetened Milkshakes and Lattes in 2028 Health Push
UK Government Backs £49 Billion Plan for Heathrow Third Runway and Expansion
UK Gambling Firms Report £1bn Surge in Annual Profits as Pressure Mounts for Higher Betting Taxes
UK Shares Advance Ahead of Budget as Financials and Consumer Staples Lead Gains
Domino’s UK CEO Andrew Rennie Steps Down Amid Strategic Reset
UK Economy Stalls as Reeves Faces First Budget Test
UK Economy’s Weak Start Adds Pressure on Prime Minister Starmer
UK Government Acknowledges Billionaire Exodus Amid Tax Rise Concerns
UK Budget 2025: Markets Brace as Chancellor Faces Fiscal Tightrope
UK Unveils Strategic Plan to Secure Critical Mineral Supply Chains
UK Taskforce Calls for Radical Reset of Nuclear Regulation to Cut Costs and Accelerate Build
UK Government Launches Consultation on Major Overhaul of Settlement Rules
×