The annual IFSL report UK Financial Sector Net Exports 2008 indicates that banks’ earnings of 23.2 billions provided the core of net exports, 60% of the total. Net exports of the UK financial sector rose by 30% to 38.8 billion in 2007.
The contribution of insurance to net exports rose to 5.5 billion, securities dealers to 4.8 billion and fund managers to 4.1 billion. Shipbrokers’ net exports rose slightly to 769 million, while other financial services fell to 417 billion. Also banks generated buoyant spread earnings of 9.5 billion from derivatives, securities and foreign exchange trading.
The global turmoil didnt affect much on the financial services’ trade surplus up to mid-2008 that rose to 21.1 billion in first half of 2008 with 28% up. Legal, accounting services and management consultancy rose to 6.3bn in 2007.
Following a strong first half, financial services’ trade surplus for the second half of 2008 may be reduced by turmoil in global financial markets and the slowing global economy, says Duncan McKenzie, director of economics, IFSL. Even so, UK financial sector net exports in 2008 are likely to be at least the same as 2007, in the region of 40bn.
L.D.