Around a decade ago, there was a lot of buzz about London overtaking New York as the world’s financial capital:
- London is Eating New York’s Lunch (The New York Times Magazine, Feb. 29, 2012)
- London Beats New York as the World’s Leading Financial Center (Bloomberg, Sept. 29, 2015)
However, financial times have changed. The next headline is from 2024 (The New York Times, May 28):
London Moves to Revive Its Reputation as a Financial Hub
Our August Global Market Perspective offers this perspective:
The price of London Stock Exchange Group [is] a pretty good proxy for the health of the business of finance itself. By way of that metric, London’s finance business has made no net progress since February 2021.
The latest issue of our Global Market Perspective goes on to discuss the Alternative Investment Market (AIM), which was created by financial authorities in 1995 to help small companies raise capital. Here’s a chart and commentary:
The number of AIM-listed companies peaked near 1,700 back in 2007, while, today, only 722 companies still trade on the exchange. That’s a 17-year slump of 57%!
More than that, initial public offerings in the UK have been scarce. In October 2023, British AI firm Arm Holdings rejected London for its IPO. And in recent months, Klarna Bank, the Swedish buy-now-pay-later company has said that it prefers to list in New York. Companies have also been strongly criticizing the UK’s regulatory regime.
Yet, the UK financial industry’s problems barely scratch the surface of what’s going on globally.
Get insights into worldwide economies and financial markets by reading our August Global Market Perspective now. Just follow the link below.
United Kingdom: How a Former Financial Empire is Losing Its Mojo
Learn about this 17-year slump of 57%
A major global financial hub shows signs of slipping into a slump. By one measure, no net progress has occurred since 2021. A significant decline in another measure dates back farther. Here are the details.
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