The ‘No time to lose: Reasserting UK leadership in financial and related professional services’ report by TheCityUK and PwC UK is based on one of the largest industry listening exercises in years, drawing on engagement with over 300 senior leaders across industry, government, regulators and academia.

It is underpinned by new economic modelling and international benchmarking from PwC.

The findings show that the UK’s strength lies in the breadth of its financial ecosystem across the regions and nations.

Dynamic hubs have developed specialisms that complement London’s market.

Birmingham, along with Manchester and Leeds, is home to talent the global market needs, and is recognised as a hub for banking operations, professional services and data analytics.

Edinburgh and Glasgow are globally recognised for asset management, pensions and sustainable FinTech and increasingly for emerging technology, data and AI.

While Belfast and Cardiff have strengths in shared service hubs with growing specialisation in legal services, cyber, RegTech, LawTech and InsurTech.

These strong regional hubs are supporting economic growth, and are home to world-class universities and colleges, vibrant business communities and strong local talent which allows them to be innovative, diversify risk and extend the UK’s global offer.

The need for growth distribution across the UK is strong as this generates high-value jobs and investment nationwide, therefore strengthening the industry’s overall resilience and reach.

Achieving this depends on regional and national hubs concentrating their efforts on scaling existing specialisms and selectively expanding into adjacent opportunities.

Findings from the report made it clear that while the increased focus from government and regulators on growth is welcome, bolder ambition and faster, more decisive action to reform the financial system and reinforce the UK’s global reputation for legal certainty is needed.

Without this, the UK risks ceding unrecoverable ground to competitor financial centres who are investing heavily in digital market infrastructure, accelerating regulatory and tax reform, and using targeted incentives to attract capital, talent and innovation.

The report adds that the impact of moving slowly is already being felt.

While insurance and professional services are outperforming, overall industry growth has flatlined over the past decade, with real growth averaging just 0.1 per cent a year since 2014 and productivity falling sharply.

New PwC economic modelling suggests that, on current trends, the industry could grow at only 0.5 per cent a year in real terms through to 2035, steadily eroding the industry’s share of the UK economy and limiting its capacity to support households and businesses through lending, insurance and investment services.

But the upside from acting decisively is substantial, with PwC modelling showing that the UK could unlock over £53bn in additional annual economic output and £22bn in additional annual tax receipts by 2035 – c.£770 per household.

Will Stevns (pictured), Midlands banking partner, PwC UK, said: “Financial and professional services is one of the UK’s greatest national success stories, and crucially, most of it sits outside London. Two thirds of the 2.5 million people working in this industry are based across our regions and nations, in relatively well paid roles that help drive local growth.

“Birmingham is among the list of fast-growing hubs like Manchester and Leeds, which is home to the talent, businesses and skills which the global market needs – it’s punching above its weight globally.

"This matters because the financial and professional services industry is a major engine of local prosperity. It operates at 2.5 times the productivity of the wider economy and contributes more than £110bn in tax - around £3,800 per UK household. 

“The sector provides the funding, insurance, and financial infrastructure behind millions of daily interactions for people and businesses of all sizes.

"If the UK acts now on the recommendations in our report, the biggest gains will be felt in the regions.”