Context
The FCA has commissioned independent research exploring how UK financial services hubs relate to regional growth, productivity and SME access to finance. Two independent research papers examine how financial services hubs contribute to UK economic growth, including whether regional hubs deliver distinct benefits compared with London, and how financial activity affects firm performance, access to capital, and productivity.
Key points to note and next actions
- Financial services are linked to higher productivity, incomes and regional growth, but the benefits are uneven and concentrated around major centres like London.
- The distribution and type of financial activity appear to matter more than the overall size of the financial sector. Growth outcomes seem to depend on where finance is available and which financial services are accessible to firms and regions.
- Access to finance for SMEs appears especially important, while geography, networks and centralised decision-making still shape financial outcomes despite digitalisation.
- These patterns may contribute to regional differences in economic performance in the UK, although the relationship between finance and growth is complex and not causally identified.
The FCA notes the following themes as relevant to its objectives and will consider them alongside other evidence:
- access to finance and market functioning in SME lending, including the role of market structure, information and potential intermediation frictions, and
- whether a more explicit spatial lens may be useful in market analysis.
- It also stresses that the findings are indicative rather than causal, have methodological limitations, and should not be treated as FCA endorsement of the authors’ conclusions or policy recommendations.