Uncertainty surrounding the U.K.’s departure from the EU has seen New York overtake London as the financial center of the world, according to a new survey of financial professionals.
U.S. consultancy firm Duff & Phelps published its 2019 Global Regulatory Outlook on Thursday. As part of the research, analysts surveyed 183 financial services professionals from 15 countries between March and April this year.
London and New York switched places in the ranking from 2018, with 52% of respondents choosing New York as the globe’s financial hub, while 36% chose London. Last year, 42% chose New York and 53% chose London.
The U.K. capital’s longer-term outlook looked even more bleak, with just 21% of those surveyed saying London would be the world’s more preeminent financial center in five years’ time. Meanwhile, 44% of respondents predicted New York would be the financial center of the world five years from now.
Hong Kong was predicted to see a rise in importance as a financial hub – although only 4% of respondents named the Asian hub as the global financial center in 2019, 12% said it would steal the crown from both New York and London within half a decade.
A handful of other cities were named as the global financial capital of the future, the report showed, with 9% of respondents predicting Shanghai would become the world’s financial center. Dublin and Frankfurt were tipped as the financial hub of the future by 4% of those surveyed, while 3% said Luxembourg would replace New York.
“While these individual numbers do not rise to the level of statistical significance, collectively they give further evidence of the combined effects of globalization and of Brexit, as the financial industry searches for a new EU financial center,” the report said.
The study’s authors also noted that responses to the question were influences by respondents’ locations, with 96% of U.S. professionals considering New York the current financial hub, and 76% of U.K. participants saying the same of London.
“But even home-country bias has its limitations,” the report added. “When asked to look ahead five years, the proportion of U.S. respondents who still name New York dips to 78% —while the proportion of UK respondents who say the same thing about London drops to 44%.”
Earlier this year, research from management consultancy EY found that the British financial services industry had moved $1 trillion in assets to other European nations because of Brexit. According to EY, a third of companies were intending to relocate some or all of their operations out of London.