Overview
In the run-up to the 2016 referendum on Britain’s membership of the European Union, a string of senior bankers warned that a vote to leave could hollow out London’s financial centre. Jamie Dimon, then chief executive of JPMorgan, said the bank could shift 4,000 roles from Britain. Ten years on, the posture of some global firms has changed: JPMorgan plans a new Canary Wharf tower it says could accommodate up to 12,000 staff - a development hailed by finance minister Rachel Reeves as "a multi-billion pound vote of confidence." Yet beneath the headlines lies a more nuanced reality: job numbers in the City of London are near historic highs and banks are reporting strong profits, even as the UK’s relative position in international finance has diminished.
Employment, relocations and the immediate fallout
To maintain access to the European Union’s 27 markets after Brexit, British firms that lost so-called passporting privileges relocated roles to other financial centres. The City of London Corporation estimates roughly 40,000 jobs were moved to EU hubs such as Paris and Dublin. City leaders and industry figures acknowledge that Brexit "undeniably weakened the City’s position," in the words of Michael Mainelli, who served as Lord Mayor of the financial district in 2023 and 2024 and highlighted relocations to rival European capitals.
Still, the Square Mile has seen employment rebound: the Corporation reports about 676,000 workers in the City of London, an increase of more than 25% since 2019. Restaurateur Soren Jessen, whose 1 Lombard Street venue overlooks the Bank of England, said sales have been stronger than ever, reflecting local demand tied to the resurgent presence of financial workers.
Capital flows and market share shifts
Despite the domestic resilience of certain financial activities, the UK’s share of global foreign capital has declined. Barclays, citing IMF data, reports Britain hosted more than A312 trillion ($16 trillion) in foreign direct investment, portfolio investment and cross-border deposits at the end of 2025, but its share fell from 8.6% in 2015 to 7% in 2025. Over the same period the U.S. share of foreign capital rose to 25% from about 20%, supported primarily by demand for U.S. equities.
Research firm New Financial finds that since 2015 Britain has lost market share in 10 of 12 categories of international finance, including foreign exchange trading, equity offerings and assets under management. "The impact of Brexit on the City has been like the UK breaking its own arm - it has not been fatal but nor has it been great, and there was a degree of self-injury," said New Financial’s founder William Wright.
What has supported the sector?
Several factors beyond Brexit helped underpin the resilience of Britain’s financial services. A global rise in inflation after the COVID-19 pandemic prompted the Bank of England and other central banks to lift interest rates, increasing banks' returns from lending activity. Political and regulatory choices in the UK also played a role: the Labour government elected in 2024 accelerated a deregulatory agenda, and financial institutions were able to avoid some new taxes and secure regulatory concessions on capital requirements.
In insurance, the government used its post-Brexit discretion to revise parts of the EU s Solvency II framework, reducing administrative burdens and easing certain capital buffers for insurers. The London Market Group reports gross written premiums have doubled over the past decade to $187 billion, a sign of strength in that segment. The tech side of finance in London has also progressed: digital bank Revolut reached a valuation of $75 billion in a November share sale, marking it as one of Europe's most valuable fintech companies.
Major banks have publicly stated additional commitments to the UK market. JPMorgan said it will extend its $1.5 trillion Security and Resiliency Initiative to Britain to help firms in critical sectors raise capital, and is investing in a Bournemouth campus expansion costing between A3300 million and A3350 million. Citigroup has said it will invest A31.1 billion in its UK operations. Those moves sit alongside the planned Canary Wharf headquarters.
Economic drag and investment shortfalls
While parts of the financial sector have thrived, the wider UK economy has struggled to match growth in the United States and has also lagged the euro zone. The government's budget forecasters estimate that long-run productivity will be 4% lower than it would have been had Britain remained in the EU, with much of the loss already realised.
Some investors see a clear change in the UK's investment appeal. "You can point to the day in June 2016 where the UK became, in reality, a less attractive place to invest," said Neil Birrell, chief investment officer at Premier Miton, who acknowledges having reduced UK holdings despite sizable positions. Higher sovereign borrowing costs have added to the headwinds: Britain s bond yields are among the highest of major advanced economies, a situation partly exacerbated by political instability that has produced six prime ministers in the decade since the referendum.
The effect on credit is tangible. Bank of England data show lending to small businesses as a share of GDP has fallen from just above 8% in 2016 to 6.5% in the year to date. A Boston Consulting Group report referenced by sector participants describes a "self-reinforcing credit trap" in which firms expect rejection and do not apply for loans, while lenders see insufficient demand and pull back.
Potential remedies and structural limits
Industry figures argue that reforms to channel more domestic pension fund capital into British growth companies could be an important lever for future prosperity. New Financial s founder suggested increasing pension investment from its current level in UK growth stocks - cited as just 0.1% of assets - could support the economy, alongside greater retail investor participation. However, these measures are proposed within the confines of the facts set out by market observers and do not guarantee outcomes.
Businesses also face higher administrative costs from changes in trading arrangements with the EU, including additional customs paperwork and disrupted supply chains. Those frictions add to the reasons some investors and firms consider the UK a less convenient base for pan-European activity than it once was.
Competing narratives on the City s future
Views differ on whether London s loss of market share amounts to a lasting decline. Michael Mainelli notes that the EU has not fully seized opportunities to build a consolidated European capital markets centre and argues this underperformance has limited the relative damage to the UK: "As the EU ... hasn t moved forward much in the past decade, the UK hasn t lost much. The City remains the capital markets gateway to Europe."
At the same time, New Financial s analysis and the migration of thousands of roles to continental hubs are reminders that the City s pre-eminence has been chipped away. The precise scale and permanence of those changes are difficult to isolate because Brexit coincided with other major global shocks - the pandemic, elevated inflation and geopolitical conflicts - that have also reshaped capital flows and market structures.
Conclusion
Ten years after the referendum, Britain s financial industry presents a mixed picture. Big banks and insurers have publicly reinforced their UK operations and certain metrics such as City employment and insurance premiums point to resilience. Yet the country s share of international capital and activity has declined in many categories, the broader economy struggles with slower growth and higher borrowing costs, and small-business lending has contracted as a share of GDP. Policy choices and higher rates have helped the sector perform in recent years, but long-term questions remain around investment, competitiveness and the degree to which the City can retain its historical dominance in European finance.
Exchange rate used in reporting: $1 = 0.7462 pounds.