'London has no rival' City still Europe's best-performing says top US think tank

'London has no rival' City still Europe's best-performing says top US think tank

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Workers in London’s Square Mile

Released today, the first-of-its-kind Europe-wide city index, measures which European regions offer the greatest opportunities for prosperity across the continent.

According to the institute, the ranking measures metropolitan areas’ economic performance using outcomes-based metrics including job creation, wage gains, manufacturing, and skilled service industry concentration.

The institute claims that London’s “economic rejuvenation” has benefited from ‘Big Bang’ policies that aided financial services and led to growth in a variety of new technology areas.

Job stats are also good for the pre-Brexit years of 2009 and 2014 with employment in professional, scientific, and technical services increasing 43.6 per cent.

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The City of London at night

The top five comprised of Inner London-East, United Kingdom – Stockholm, Sweden – Budapest, Hungary – Pomorskie, Poland and Nord-Vest, Romania.

Frankfurt and Paris do not feature and the only city on the list of any real global gravity is Berlin, Germany. 

The report comes amidst a deluge of conflicting reports that major City of London firms are considering their position as Britain prepares to exit the EU.

Lloyd Blankfein tweeted last month: “Just left Frankfurt. Great meetings, great weather, really enjoyed it. 

“Good, because I’ll be spending a lot more time there. #Brexit”

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‘London has no rival’ says top US think tank


There is no one explicit rival city to London right now

Kevin Klowden, Executive Director of Centre for Regional Economics


However, Kevin Klowden, Executive Director of Centre for Regional Economics told Express.co.uk, “There is no one explicit rival city to London right now.

“London’s biggest appeal is that it is Europe’s global financial centre and that’s not a role anywhere in Europe is readily able to take… Yet.

“A critically ‘hard’ Brexit will cause concern over how the capital markets are accessed from London.

“You can see firms making a conscious decision to move firms out especially if their European customer base is strong enough that it makes sense to reach them in Berlin, Paris or Frankfurt.”

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Morgan Stanley in London

Following on from the Milken Institute’s research, Mr Klowden identifies three main areas of concern that could make or break Brexit for City of London firms.

“Number one,” Mr Klowden says, “Is the issue of capital flows. The ability to move money in and out of the City in an unrestricted capacity. If there are issues in accessing the customer base and accessing the various markets then that will become the biggest single concern.”

If this happens, Mr Klowden suggests London’s financial operations could move to Dublin as a short-term fix.

The second major post-Brexit issue for the City of London is the human capital question of attracting the world’s most skilled workforce to work in London.

The third, Mr Klowden says is “equivalence issues” and the regulatory regime that sits beneath The City and Europe.

Jeremy CorbynGETTY

Mr Corbyn attacked Morgan Stanley

The report concludes that despite Brexit, London remains Europe’s top financial service cluster and, “spars with Wall Street for the designation as world leader; by many measures it outshines its New York competitor”.

The news that the City of London has topped a US think tank index comes after Labour Party leader Jeremy Corbyn launched a staggering attack on Morgan Stanley after warning that a Labour government – under the leadership of Mr Corbyn – posed as much a threat to Britain as Brexit.

“Bankers like Morgan Stanley should not run our country but they think they do,” Mr Corbyn said in a video posted on Twitter that showed the towers of the City of London and Canary Wharf financial districts.

“So when they say we’re a threat, they’re right: We’re a threat to a damaging and failed system that is rigged for the few,” he said.

But the attack from a potential Prime Minister on one of the UK’s prestige industries has raised concern that Corbyn’s constant attacks on the City are seriously undermining Britain’s Brexit negotiating hand.

Tim Focas, director of financial services for think tank Parliament Street told Express.co.uk: “Singling out a bank that plays such a pivotal role in how European markets operate, is not helpful as tensions between the EU and the City are already mounting over issues such as euro-denominated clearing. 

“The City, which encompasses a wide variety of firms above and beyond the investment bank Corbyn’s lambasting, provides a deep pool of human capital that helps finance investment and job creation on a pan-European basis.

“The post-Brexit European continent needs a new generation of wealth creators creating companies, generating employment and wealth for Europeans. But Corbyn fails to understand is that this requires interconnected and efficient capital markets which is underpinned by the bank he is criticising.”

Asked whether Mr Corbyn understand the value of The City to the UK’s balance sheet, Mr Focus says: “You can’t acknowledge what you don’t understand. The contribution the likes of Morgan Stanley make to daily market liquidity is the foundation of a healthy savings society.

“Existing tax and retirement savings rules drive the normal people Corbyn claims to protect to invest more savings in the capital markets, helping pension schemes provide for our aging population. These rules not only support retirement provision, but also provide a vital source for the millions of small businesses attempting to raise finance.”

On the long-term consequences of a Labour-government attack on The City Mr Focus adds, “Labour would completely dismissing an industry that contributes over £5 billion a year to the treasury.

“As our major financial institutions continue to be hamstrung by rules to increase capital reserves, fund managers provide a much-needed alternative source of finance which can meet the shortfall in lending. Labour would punish these firms with punishing tax measures which, ultimately, would stifle job creation and growth across the wider economy.”

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