City’s ranking threatened by Rock crisis and taxation of nondoms

Source: Exec Digital UK

Date :20/02/2008 09:03:37

The Northern Rock saga and the proposed taxation of nondoms are threatening the City’s global ranking as a competitive financial centre.

A report in The Times referred to The Global Financial Centres Index, which ranks the competitiveness of 46 world financial centres. Published every six months by The City of London, the research is carried out by Michael Mainelli, Professor of Commerce at Gresham College, and his Z/Yen consultancy.

Trend

London has previously outranked New York, the second runner, as the ideal place to carry out financial services. However, the next report, due out next month, will show that the City’s lead has been cut drastically, the Times reported on Wednesday.

The Times noted the research was done before the botched sale of Northern Rock and last weekend’s forced nationalisation.

If the recent trend continues, London could end up on level with or even below New York in the next study in the autumn, the newspaper said.

Report

The research takes into account a wide range of issues relating to how various financial centres conduct their business and produces an index for each. In the last September’s report, London was almost 20 basis points ahead of New York.

Figures seen by the newspaper suggest that this lead has been cut to less than ten points.

Two main factors to be cited by the report relating to London are Northern Rock and the proposed taxation of nondomiciled residents, large numbers of whom work in the City.

The newspaper quoted one highly placed City observer as saying that the impending report was “no surprise.”

“For the nondom element, Labour has removed the welcome mat. We’re not seen as such an attractive place.”

February 20, 2008