London’s financial sector is set to continue outperforming its competitors in Europe, despite reports of foreign plots to exploit Brexit and weaken the City.
The capital's GDP is predicted to grow at a rate of 2.3 per cent each year from now until 2021, beating Paris at 1.6 per cent and Frankfurt at 1.5 per cent.
The new forecast comes from an Oxford Economics report published on Monday.
It follows claims from the City of London’s envoy on Brexit of a plot by France to exploit the UK’s departure from the EU in a bid to disrupt London’s financial sector.
In a leaked memo, Jeremy Browne claimed the French are “crystal clear about their underlying objective: the weakening of Britain, the ongoing degradation of the City of London”.
Earlier this month a major report from London think tank Centre for London also warned up to 70,000 City jobs could be lost in the “catastrophic” event if Britain crashed out of the Single Market.
Over 20 financial services firms are already set to expand in Paris and Frankfurt, City A.M. has reported. It is thought Frankfurt will benefit from 10,000 extra jobs after Brexit, while the French capital is hoping for an extra 20,000 in the long-term.
Morgan Stanley and Citigroup have already pledged to set up offices in Frankfurt with Lloyds Bank also said to be preparing to expand in Frankfurt.
But Dublin is forecast to beat London in its growth forecast, today's Oxford Economics report found. The study predicted Dublin would grow by 2.7 per cent after pledges of expansion from 15 firms.
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Although the City of London Corporation has proposed regional visas, it is thought the Treasury would prefer a sector-based visa.
Banks pay £24 billion in taxes to the exchequer while the UK’s insurance and financial sector employs more than a million people. Almost a third of the workforce in London’s Square Mile is international.
