This article" reviews the contribution of financial services to the UK economy and assesses the position of London as a world financial centre, indicating some of the factors that have underpinned its performance over the years. The article goes on to consider various potential influences on the future development of its role, including the progress of deregulation in other countries, and regulatory, factor-market and technological conditions at home.
Two points of clarification are necessary at the outset. First, although activity in financial services is spread throughout the country, international business, which is the focus of this article, is largely-though not exclusively-undertaken in London. Thus, throughout the article 'London' is used as shorthand for the financial sector oJ the UK economy, except where the context is clearly specific to London as distinct from other regions. Second, the article focuses on the performance of various parts of the financial services sector in the United Kingdom, and of the sector as a whole, but does not address in any depth questions of the nationality or ownership of participant firms; nor does it discuss the activities of British firms abroad.
London as an international financial centre