Britain still top European country for financial services despite Brexit dip

Britain remains the most attractive destination in Europe for financial services despite losing some activity to the Continent as a result of Brexit, analysis by EY has found. Read more: Britain still top European country for financial services despite Brexit dip

Britain still top European country for financial services despite Brexit dip

Britain remains the most attractive destination in Europe for financial services despite losing some activity to the Continent as a result of Brexit, analysis by EY has found.

Foreign companies invested in 56 financial services projects in the UK last year, 43 fewer than 2019 but still seven more than France, the second most popular location. Britain also accounted for £1 in every £5 of global financial services investment in Europe, down from £1 in every £4 in 2019. London was the leading European city, with 38 projects, the annual study found.

Although the gap closed, as banks and insurers prepared for the end of free access to European Union markets, investor sentiment on the future of UK financial services remained positive.

Anna Anthony, UK financial services managing partner at EY, the accountancy firm, said: “While its lead may have narrowed, most likely only short-term in response to pandemic-related business disruption and Brexit, investor sentiment suggests that the UK is looking to a strong future, and will continue to outperform the rest of Europe.”

Britain’s free trade deal with the EU came into force on January 1 but it contained little on financial services. Brussels has not granted the UK “equivalence”, which has effectively resulted in a hard Brexit for finance.

A memorandum of understanding that will establish how the jurisdictions will co-operate has been drawn up but has yet to be approved by the EU’s 27 members. The deal cost London its status as Europe’s top share trading centre to the Netherlands and officials are concerned that other EU localisation rules will draw more business away. Experts say the City could lose as much as 10 per cent of its activity over time.

France will step up its charm offensive to lure global banks next week. President Macron, a former Rothschild banker, has invited an elite group of bank bosses to the Palace of Versailles for a “Choose France” event, The Sunday Telegraph reported.

Jamie Dimon, chief executive of JP Morgan, and David Solomon, boss of Goldman Sachs, will be among those presented with reasons to invest there. Macron is expected to draw attention to France’s liberal business travel regime for those who have been fully vaccinated. Wall Street is lobbying the UK to introduce similar rules.

The EY report revealed that foreign direct investment in UK financial services projects plummeted last year from 99 projects the year before. In 2019 the number of foreign projects in the UK was more than double Germany, then the second favourite destination. France leapt above Germany last year and the gap with the UK is now just 14 per cent.

However, EY suggests the UK will retain its status as the financial capital of Europe. It was judged to have the most investment-friendly Covid recovery plans and to be the most attractive for financial services investment overall.

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Britain still top European country for financial services despite Brexit dip

Source : Business Matters More   

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UK economy accelerates as tourism and hospitality emerge from lockdown

The UK’s economic recovery accelerated in May as tourism and recreation firms reopened, but the delay in ending Covid-19 restrictions is putting hospitality firms at risk, research shows. Read more: UK economy accelerates as tourism and hospitality emerge from lockdown

UK economy accelerates as tourism and hospitality emerge from lockdown

The UK’s economic recovery accelerated in May as tourism and recreation firms reopened, but the delay in ending Covid-19 restrictions is putting hospitality firms at risk, research shows.

Eleven out of 14 UK sectors reported faster growth in output month on month in May, up from nine in April, according to the Lloyds Bank UK Recovery Tracker, as the UK moved further out of lockdown.

The tracker found that the UK tourism and recreation sector recorded the sharpest rise in output growth as British hotels, pubs and restaurants benefited from pent-up consumer demand.

Firms took on more staff to handle rising demand. All 14 sectors reported jobs growth in May, led by manufacturing, while the tourism and recreation sector added jobs for the first time since January 2020.

Jeavon Lolay, the head of economics and market insight for commercial banking at Lloyds Bank, said sectors that had been acutely affected by coronavirus restrictions were now outpacing those that operated more freely during lockdown.

“Whether the four-week delay to further easing of restrictions will impact this trend is unclear. But while the delay is understandably disappointing for many businesses, there’s no denying that the economy is now on a much sounder footing,” Lolay said.

The survey also showed that companies across the economy raised their prices in May, led by chemicals and metals and mining producers.

“While UK inflation jumped higher than expected in May and stronger demand saw more businesses pass on rising costs to their customers, it’s arguably still too soon to worry about inflation spiralling out of control,” Lolay said.

The fast-food chain McDonald’s announced expansion plans on Sunday and will recruit 20,000 workers over the next 12 months as it opens 50 new restaurants in the UK and Ireland.

But the Covid-19 restrictions are continuing to hurt the hospitality sector, particularly the night-time economy.

About 25,000 licensed premises were still shut at the end of May 2021, according to research from CGA and AlixPartners, which warned that thousands more clubs, restaurants, pubs and bars are at risk from the delay to ending lockdown.

CGA and AlixPartners found that more than three-quarters of Britain’s licensed sites were trading by the end of last month, up from about a third in April, thanks to the return of inside service.

However, while more than nine in 10 food pubs, high street pubs and casual dining restaurants are open, sectors that rely on late-night trading are still in jeopardy of failure, the report found.

“Many operators will have reopened in anticipation of restrictions falling away on 21 June, and likely forecast and accepted suppressed trade for the period up to that point,” said Graeme Smith, the managing director of AlixPartners.

“While far from ideal, knowing that ‘freedom day’ was on the horizon meant operators could battle through this challenging time, perhaps welcoming team members back to the business in anticipation and getting operations up to speed. A further delay of four weeks is a devastating blow, creating significant uncertainty and further financial strain.”

Michael Kill, the chief executive of the Night Time Industries Association, has urged the government to lift restrictions on 5 July – at the two-week review point set when the restrictions were extended. He said the industry was “on the verge of breaking”.

Read more:
UK economy accelerates as tourism and hospitality emerge from lockdown

Source : Business Matters More   

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