London - a true alpha city
Cities are becoming ever more economically dominant – and top-tier cities are arguably more influential than the countries they sit within.
3 minutes to read
- London is one of only three cities globally to be so closely integrated with the global economy, making it an alpha ++ city
- The city is recognised as the world’s leading global centre for currency trading
- Businesses are drawn in by the skills and innovation they are able to harness
On top of the world
When it comes to financial activity, London not only remains a leading global hub but is still growing its influence in multiple areas. Take foreign exchange trading: according to the tri-annual survey by the Bank for International Settlements, the UK is home to 43.1% of global foreign exchange turnover, up from 36.9% in 2016. Average daily turnover rose by 48.6% between 2016 and 2019, far outpacing the global growth rate.
London is recognised as the world’s leading global centre for currency trading by the City of London Corporation. The European office of the People’s Bank of China recognises it as the largest offshore Renminbi trading hub. USD 85bn was traded in Q2 2019, up 23% on the same period last year. In short, it is the world’s premiere currency trading hub.
"The proximity to world class educational institutions is quickly translating into a recipe for business success"
More than a finance powerhouse
London is also leading the way for the growing fintech sector. A 2019 report released by London & Partners and Innovate Finance, put London in the top spot for the number of venture capital investments in fintech businesses (114), ahead of New York’s 101.
The skills for success
56% of London’s population is educated to degree level or above, the fourth highest level in the world. And the outlook remains healthy: The Times 2019 Higher Education Top 200 universities for 2019, shows London has the highest number, with five in the top 200. Paris and Hong Kong also have five, but on average London’s are ranked higher.
" International students account for 53% of those attending London’s top universities"
The quality of education has global appeal, with international students accounting for 53%, on average, of those attending London’s top universities. This pool of talent means businesses are drawn to the city to harness the skills and innovation that London is able to generate.
The proximity to world class educational institutions is quickly translating into a recipe for business success. With the ratcheting up of the war for talent, businesses are rushing to position themselves near talent hubs. This has, for instance, been a key ingredient in the success of commercial developments such as White City, which exemplifies the importance of being at the doorstep of a world renowned university – Imperial College.
"With a renewed sense of political stability, London’s fortunes as a gateway for global capital appear to be secure"
Political significance
We look at the number of embassies and high commissions in different global cities, as well as the number maintained abroad by each country as a measure of political importance. Using these two measures, London comes in third, behind Beijing and Washington, with 167 located in London and the UK maintaining 160 abroad. Whilst Brussels is home to the highest number of embassies and high commissions, with 185, Belgium only maintains 84 abroad.
It is this sort of hard and soft political influence that has helped London, and indeed the rest of the UK, carve an entrenched position in investors’ minds around the world. And with a renewed sense of political stability, London’s fortunes as a gateway for global capital appears to be secure.