According to The Global Financial Centres’ report, the City of London is no longer the financial capital of the world.
The report slashed City’s rating to an equal of New York, where their financial centres took a real battering during the global financial crisis. This is the first time London has ever been knocked of the top spot as a the world’s leading financial centre, and it was also one of just four cities to lose points in the report.
City’s rating dropped by 14 points to 775, the same score as New York. The news comes as a stark warning to politicians and financial leaders trying to promote the Square Mile as a leading financial base. It is believed the drop in score may be attributed to recent tax and business rate increases, including Alistair Darling’s banking bonuses’ tax.
The Global Financial Centre’s report takes a survey of many different factors within such cities, such as transport links, diversity in services, qulaity of office space and how well connected the cities are.
Asian financial hubs such as Hong Kong and Singapore saw massive improvements in their ratings this time around, now they are seen as serious competition to their western counterparts. Hong Kong became the favourite for insurance firms and professionals, the first time other western big hitters such as London or New York have lost the top spot.
Chairman of the policy and resources committee of the City of London, Stuart Fraser said, “Respondents have assessed the two leading global centres of London and New York as level on ratings for the first time – a fact which bears out our view that these two are the ‘twin sister-cities of world finance’. The evidence of the survey points to the continued high ratings for these two leading global centres and reflects the multi-faceted nature of their competitive advantage. They both have rich institutional and communication linkages across the world. These two leading centres benefit from good levels of mutual co-operation.”
Despite the drop in rankings, professionals and experts in the field believe that with some improvements, City will be back on top again.