GDP FORECASTS


2013 London UK


0.9% 0.7%


2014 London UK


1.7% 1.3%


2015 London UK


1.9% 1.5% Source: CEBR


WHAT DO THE REST OF EG’S LONDON FORUM THINK?


Tony Travers, director of the Greater London Group, LSE “Concerns about London’s status are voiced regularly.


In the early 1990s, it was believed that Tokyo might overtake London as a global financial centre. During the run-up to the creation of the euro, it was widely thought that London would lose out to Frankfurt if Britain did not join the new currency. The emergence of Shanghai and Mumbai are today seen as challengers to London and New York. “The on-going problems of the world’s financial industry clearly pose threats to London. No one can be sure what the longer-term effect that issues such as limits on bankers’ bonuses, capital requirements and public attitudes towards the banking industry will have. It is possible Britain will move from under- to over-regulation in one step. “As of now, there is a greater risk to London as a global financial centre than for many years. Policy-makers may accidentally do something they don’t intend to.”


Jo Valentine, chief executive, London First “There are three threats to London’s future as a financial centre.


“One is that the eurozone may insist


its business is conducted within its borders, depriving London of its natural hinterland. “Another comes from emerging


EG


LONDON FORUM


IN ASSOCIATION WITH


markets as the centre of economic gravity shifts. Singapore and Hong Kong are closing the gap, while the Chinese government has proclaimed its ambitions for Shanghai to become an international financial centre by 2020. “The other big threat comes from New


York. The US dollar remains the dominant international currency, and New York already offers an established alternative. “If the Big Apple really wanted to


steal London’s international crown, then US tax or regulatory incentives [at a time when UK and EU policy-makers remain intent on punishing the sector] would render London deeply uncompetitive. “The nightmare scenario is a


combination of all of the above – European business being held within the eurozone and non-EU business migrating to New York or emerging


The EG London Forum debates key topics affecting the capital each month. To watch the video specials, go to www.estatesgazette.com/eglondon


13 April 2013 www.estatesgazette.com 93


markets. Should we be worried about this? Yes we should. “Financial services are the biggest


contributor to our economy. The industry employs over a million people, and thousands of non-financial businesses depend upon it. It is the largest tax contributor, and the most significant UK export. Without the financial services sector, London is not globally relevant.”


Dan Bayley, head of London offices, BNP Paribas Real Estate “When we look back at 2012, central London


take-up levels from the banking and finance sector continued to drop, accounting for only 12% of the market, a fall of 6% compared with 2011. In comparison, the sector represented 31% of the market in 2010. “Current demand from the sector is


modest and mainly led by lease events. Positively, there is some activity within fund management houses. “Looking ahead, the future remains


unclear for financial organisations – this is why many have chosen to restructure current leases instead of moving. “Overall, despite a drop in recruitment


and growth within the sector, it does still remain a valid target for landlords. However, those who do take new offices will probably look for more efficient space to accommodate shrinking headcounts.”


Nigel Kempner, executive director, Quintain “London’s status as a leading financial centre is categorically not at


risk, as the capital remains the major player in the foreign exchange market, which sets global exchange rates, with over 30% of all FOREX transactions taking place here. It is also a key location for the similarly significant insurance industry. “Importantly, London’s status as a


financial powerhouse relies on a combination of positive factors, of which banking is just one. Clearly, increasing taxes on the sector, or further interference from Brussels, would have a negative effect. “The strength of our banking sector depends on the will of financial leaders to do business here, and that remains demonstrably strong.”


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