UK Finance Body Urges Engagement with ‘Old’ Allies like U.S. and Japan After Brexit

By Huw Jones

LONDON – Strengthening partnerships with European businesses and long-standing allies such as the United States and Japan is essential for the UK to maintain its global financial position following its exit from the EU, according to an industry group.

TheCityUK released a set of recommendations for the financial sector and the government, noting that the referendum decision to leave the EU has heightened the challenge of competing globally in finance.

Cities like Frankfurt, Amsterdam, Paris, and Milan are vying for a share of London’s financial services market.

Chris Cummings, the chief executive of TheCityUK, emphasized the importance of recognizing the reliance of many European firms on the UK’s financial services as well as related professions such as accounting and law. Support from these companies will be crucial in upcoming trade negotiations with the EU to maintain access to the single market.

Cummings remarked that major European corporations prefer to conduct business through London due to its rich talent pool and extensive capital markets. As long as these "buyers" continue to seek services in London, banks and other "sellers" are likely to remain in the city.

He pointed out that while France and Germany could develop deeper capital markets, such a transition would take time.

The report called for the finance ministry to enhance its Financial Services Trade and Investment Board and to direct its efforts towards established allies like the United States and Japan, along with emerging markets in China and India.

The specific terms of the UK’s future trade arrangements with the EU may take years to finalize.

John McFarlane, Chairman of TheCityUK, stressed the need for a united and confident voice in communicating the desired outcomes of the impending negotiations to policymakers.

In the interim, it is critical for the government to convey that the UK remains a stable business environment.

Cummings commented on Prime Minister Theresa May’s decision to reassess major projects like the Hinkley Point nuclear power plant, noting that this has taken some investors, particularly from China, by surprise.

He concluded by emphasizing the necessity for the UK to remain open for business and urged the Prime Minister and her team to foster constructive relationships with European leaders.