The value of UK financial/related professional services exports increased by 56% between 2016-2023. Financial services (finance activities plus insurance) were 62% of this increase, and related professional services (legal, accounting and management consulting services) were 38% of the increase.
In my last blog post, I analysed trends in the UK’s financial services exports to the EU over the past seven years. In that post I used a relatively basic metric of growth rates, noting that “between 2016 and 2023, financial services exports from the UK to the EU increased by almost 50%, thanks to a 22% surge in growth in 2023”.
We have now built on this work in three ways: firstly, by broadening out to look at related professional services exports as well as financial services exports; secondly, by analysing industry exports globally, rather than just those going to the EU; and finally, by looking at contributions to growth rather than simple growth rates.
Contributions to growth assess the specific impact of different components on an overall growth rate, providing a more nuanced understanding of what drives aggregate growth. Because contribution calculations take into account components’ share of the total as well as the rate of growth, they can provide a more detailed picture than simple growth rates, since the latter can be misleading because of the arithmetic effects of small starting-point values.
Our analysis shows that the value of UK financial and related professional services exports increased by 56% between 2016 and 2023. Financial services (finance activities plus insurance) accounted for 62% of this increase, and related professional services (legal, accounting and management consulting services) accounted for 38% of the increase.
Contributions by sector
Looking just at financial services, we find that between 2016 and 2023, insurance exports increased by 81%, almost three times the growth of financial activities exports (32%). However, financial activities made a much larger contribution to growth, given that its exports are around four times the value of insurance exports:
Considering sub-sectors, management consultancy services and Financial Intermediation Services Indirectly Measured (FISIM)[1] contributed most to the growth of total financial and related professional services exports, representing 17 and 11 percentage points out of the total growth of 56%, respectively.
Within related professional services, management consulting contributed the most to the total financial and related professional services export growth of 56%, according to our estimates. It and accounting services both showed a significant increase in exports over the period, both at 164%. However, the levels of exports for management consulting were about five times higher than for accounting (explaining its much higher contribution to growth)...
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