There was an interesting article in The Sunday Times yesterday about how London has taken over from New York as the world’s financial centre, why its happened and what the effects on London will be.
According to the story around £9billion will be paid out in bonuses this Christmas and around 4,200 people working in the City of London will get £1million or more, not too shabby.
The story says that what London has going for it are access to international markets, being where its is on the map means its trading overlaps with both the Far East and US markets, there are plenty of skilled staff available, good access to customers and the regulation of the financial sector is not as tight as the US where, since Enron and WorldCom, Congress has passed something called the Sarbanes-Oxley Act which makes listing on the US exchanges cost companies millions.
Also since 9/11 the whole hyped security situation has not been good for the US with 10% less business travellers going there in 2005 compared to 2004. That’s one of the things London has to watch out for, a couple more events like the tube and bus bombings of 2005 and companies might think about going elsewhere. Being up to our necks in it in the Middle East makes all those shiny glass offices around Canary Wharf a dream target for brainwashed Johnny sucide bomber.
Staying out of the Euro has also helped, Frankfurt was supposed to be the new European financial centre because it was the home of the European Central Bank but London now trades more Euros each day than the rest of Europe put together.
Another reason London’s attractive, which I wasn’t aware of, is that if you work in the US you get taxed on what you earn globally whereas in the UK its only on what you make here, so its an incentive for a lot of the big players to base themselves here.
All that money being made is certainly changing London. There’s building going on everywhere, whether in the business areas or residential and the cost of property is still going up and up. Go along the banks of the Thames and all the empty warehouses have been converted into apartments or take a walk around somewhere like Notting Hill and the thing you’ll notice is how much work is being done on the big four and five storey townhouses.
Some people say the concentration of wealth is a bad thing but as long as these people are spending and its starts to trickle down its got to be good for London. The one downside is the housing situation where demand is miles over supply and if a section of people snap up everything for investments the squeeze is really on anyone with a normal salary to get somwhere to live.
For the moment its boom time in the finance and banking industry in London. If that’s where you work now’s the time to come on over , salary’s are high and there’s lots of jobs, and you won’t be short of things to spend your bonus on.
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