Financial and professional services sector ‘bedrock’ to UK economic growth
The UK’s financial and professional service industry has continued to be “a bedrock of national economic strength”, with nearly 2.5m people employed across the sector.
New research from TheCityUK reveals that approximately one in every 13 jobs in the UK is held in the financial and professional services industry, as the body presents policy recommendations to the government.
According to data from 2023, the sector contributed £285bn in economic output, accounting for 12.6 per cent of the UK’s total gross value added.
This growth isn’t just coming from the City, but all around the UK. The report noted that over the past decade, the workforce in this sector grew by more than 326,000 across the UK, with over half of this jobs growth occurring outside the capital.
Beyond London, major centres of industry employment include Manchester, Birmingham, Edinburgh, Bristol, Leeds, Cardiff, and Belfast, each hosting over 20,000 jobs.
The sector, especially roles within the financial services, continue to pay well with aveage annual earnings nearly double the UK average in 2023 at £69,474.
The City remains a global hub for international wholesale financial services and professional services firms, with 902,000 people employed, contributing £139.5bn to the capital’s total gross value added in 2023.
The sector is an important driver of growth for the British economy, so much so that law and professional services were one of the key components in the government’s 10-year growth plan, revealed last week.
Invest 2035 was Labour’s promise to turn the Square Mile into “the world’s most innovative full-service financial centre”.
However, last week, the UK’s Big Four accountancy firms were reported to be cutting hundreds of jobs and pulling back sharply on graduate recruitment, as AI begins replacing the junior roles once filled by school and university graduates.
Calls on further action for more growth
In its report, TheCityUK has outlined its “practical policy framework” to build on the sector’s success, enabling the industry to drive further growth across the country.
This included ensuring that the new Strategic Investment Opportunities Unit in the Office for Investment is built on a real and close partnership with the private sector, including the use of seconded individuals and other industry experts.
The membership body also called for the government to stimulate local growth across all English regions, and to create a new Leadership Academy to gather expertise.
The body has also called on the government to develop pipelines of local talent by ensuring Skills England works closely with businesses, including on a more flexible Growth and Skills Levy.
Miles Celic, CEO of TheCityUK, said: “Financial and professional services are a national strategic asset and have a central role to play in delivering growth, as is reflected in the recently launched Modern Industrial Strategy.”
“The industry is a vital contributor to the economy, providing well-paid jobs and supporting the financial needs of people across every region and nation of the country.”
“We urge the government and political leaders across the UK to work hand in glove with the industry so that, together, we can turbocharge local growth and renewal,” he added.
This comes after Kemi Badenoch spoke exclusively to City PM to apologise to the business community for any trust lost under previous Tory governments.
“We know business, we get it, we come from a private sector background and we are the ones who are going to make sure that we deliver what they need to see. We are their champions,” she said.