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UK Growth Industries - The Finance Sector - Jochen Schaefer-Suren

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Over a million people within the United Kingdom are directly employed by the financial services sector, with another million employed in related services.
Article: https://jochen-schaefer-suren.co.uk/uk-growth-industries-the-finance-sector/

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UK Growth Industries - The Finance Sector - Jochen Schaefer-Suren

  1. 1. UK Growth Industries - the finance sector Over a million people within the United Kingdom are directly employed by the financial services sector, with another million employed within related services sectors. In terms of UK business sectors, that one million people working within a UK based professional services industry makes it one of the biggest growth industries in the UK. The City of London is still one of the most highly ranked financial centres in the world, thanks to the London Stock Exchange, and accounts for just under one-third of overall employment in the sector within the UK. A lot of other finance sector workers are employed outside of the City of London in thriving districts elsewhere across the UK, with large concentrations of firms in the Cities of Manchester, Leeds, Bristol, Edinburgh, Glasgow, Cardiff and Belfast. Within the EU, the UK is still the largest centre for asset management, with almost £4 trillion worth of assets under management. This sector provides direct employment to around 24,000 workers overall, whilst the associated sector of Insurance companies employ around a further 300,000 people. Financial services therefore is still a major player within the UK economy, and even with the looming spectre of Brexit still a factor, employment within the finance sector continues to rise overall. Renowned Fund Manager and Financial Sector Expert, Jochen Schaefer-Suren of Principal Real Estate Europe, has this to say about the current and future status of the UK’s financial sector. ‘Brexit or no Brexit, London is still standing firm as one of the World’s top financial sectors. Losing our world finance capital status this year to New York was a blow, but it’s not necessarily seen within the City as one which London will not recover from’.
  2. 2. Looking away from insurance, the UK retail banking sector includes a vast number of commercial banks and building societies, broking firms, independent financial advisers, insurance brokers and credit card services. Roles for graduates and newcomers to this bustling and still growing industry can vary. On offer would be things like customer services, through to business account management and general management, with operational and specialist activities such as IT, legal and compliance, marketing and human resources other important areas of employment within the sector. The UK scores highly in terms of breadth of financial services, depth of specialism and global connectivity, making it still an attractive place to base your financial services company. Technological improvements and the advancement of the internet have reduced the historical emphasis on geographic location by promoting global working as an opportunity, and this has shifted the competitive focus onto the flexibility of the workforce within a company.
  3. 3. This development has been matched by the increasing availability of high quality business, IT and digital marketing, and professional education in universities, and through the strong regional presence of the major professional bodies. Although the sector has been badly affected by the credit crunch, the global economic downturn and of course the ongoing Brexit saga, the UK financial services industry remains one of the most stable in the world. Many organisations within the industry are part of international groups or have international interests and have clients based outside of the UK. These global firms can offer overseas career development opportunities, particularly in emerging economies where fluency in a specific language can be advantageous. Graduates with IT and language skills are likely to find no shortage of opportunities within the finance sector, and that shows no signs of changing overall. If we look at some ​key statistics​ about the financial services industry in the UK, we can see that in 2017 the financial services sector contributed a massive £119 billion to the UK economy: that’s an impressive 6.5% of the total economic output of the UK. In keeping with the points about employment within the sector made above, the finance sector was notably the largest in London, where 50% of the sector’s output was generated. There has been a wide disparity in the financial sector’s contribution to the economy across different regions and countries of the UK. The financial sector contributed a gross total of £58.2 billion to London’s economy in 2016, 14% of London’s total economic output. This is a much higher proportion than in any other part of the UK. In the fourth quarter of 2017, there were 1.1 million jobs in the financial and insurance sector, which accounted for 3.2% of all jobs in the UK. The number of jobs in the financial services sector has remained broadly steady over the past few decades, but the proportion of jobs in this industry has fallen as the number of jobs in the whole economy has grown. What the effect of Brexit will have on this figure is unknown. Economists will be closely monitoring the reported numbers of jobs within this industry during 2019 and 2020 to try to get a better understanding of the effect of Brexit on this sector overall. The UK historically has a large trade surplus in financial and insurance activities (exports exceed imports in the sector) of £51 billion. In 2016 exports of financial services were worth £61.4 billion, while imports were worth £10.1 billion, resulting in a trade surplus of £50.8 billion. Financial services made up 25% of all UK service exports and 7% of all service imports. The UK has maintained a trade surplus in financial services in each of the last ten years, peaking at £51 billion in 2016. The financial services sector, and its continued growth and well-being, are vital to the continued growth of the UK economy. Without the City of London and that financial hub performing and growing, the UK becomes a much more static and struggling economy.

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