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Financial services could create over 250k jobs

Published on Sunday, 21 Jul 2013
The headquarters of HSBC Holdings Plc, left, No. 1 Canada Square, or Canary Wharf Tower, center, and Citigroup Inc.'s offices. (BLOOMBERG)

More than 250,000 British jobs could be created as a result of growth in the U.K. financial services industry, according to PricewaterhouseCoopers LLP.

About 47,000 positions could be added within the industry itself, while there is potential for 218,000 to be added in the wider economy, the accounting firm said in a report today. The industry’s growth may cause a 2 per cent to 3 per cent increase in the country’s gross domestic product, according to PwC.

U.K. businesses spent more than £113 billion (US$172.5 billion) on financial services in 2010, the period for which the most recent official data is available, PwC said. The financial industry bought £90 billion worth of goods and services from other parts of the economy, it also said. The biggest outlays from financial firms were on telecommunications, information technology, transport and catering.

“The financial services sector has a critical role in the U.K. economy,” said Nick Forrest, director and financial services economist at PwC. “In addition to providing credit, it creates demand in other sectors and helps improve the flow of capital around the economy.”

PwC’s calculations are based on a scenario where a “robust regulatory regime” facilitates growth of the financial industry and where economic conditions are also beneficial.

In an alternative scenario, where financial services growth is constrained by weaker economic conditions and a regulatory environment that “does less to facilitate growth”, U.K. GDP could rise by just 0.2 per cent in the period and only 12,000 jobs be created, according to the report.
 

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