London: How to make the city thrive

Krishna: Welcome to The Insight in 15, I'm Krishna Grenville-Goble and today I'm joined by Karim Haji, our Global and UK Head of Financial Services to talk about whether London is in decline or on the rise. As normal Karim, we've got 15 minutes so we're going to jump straight in. 

So Karim, over the last few years, there's been lots of stories about London being in decline, that the city has lost its edge and that global investors and capital are looking elsewhere. Does that perception sort of match what you're hearing and seeing? 

Karim: Yeah, I think first thing to recognise is that London is broader than just the IPO and equity markets. So for example, London has the debt markets, the FX markets, the money markets, the largest insurance market, commercial insurance market in the world. 

It actually, there are two times as many dollars traded in London as there are in New York. London is also a big investor in the rest of the country. So, what happens in London spreads across the whole country. So for example, it creates 2.4 million jobs. It contributes 110 billion of taxes to the exchequer. 

And actually, when you talk to FS leaders and certainly our survey backs that up, most people say that this narrative is actually wrong. Six out of ten actually believe this narrative is way overplayed. Many parts of London are thriving. 

Of course, we do have to recognise that the equity markets have had challenges, but London is not unique to that. Everyone around the world, all the equity markets, have had more challenges. But when you look at some of the other broader statistics, London is still thriving. 

One thing we do need to do, though, is to make sure that we improve and continue to make sure it thrives in all aspects, including the equity markets. 

Krishna: So there's clearly been a lot of headlines about the IPO market, and we do need to look beyond the listings, but there's no doubt that 2025 was a bit of a mixed year for IPOs. So what's the outlook for 2026? 

Karim: 2025 and particularly the first half of 2025 was a very challenging year for IPO markets in London, but also across the world. One of the factors was the high interest rates, the global uncertainty around the place where it was difficult for people to get certain valuations and also attract investors at the right price. 

So it was very subdued. At the back end of 2025, we actually saw that changing. So we saw more activity all around the world but also in London, and we're really hopeful that 2026 would actually be the year where that would thrive again. And you could see that in many markets. 

Of course, one of the challenges we now face today is more volatility, more uncertainty because of recent geopolitical events. And that may well delay some of the trend that I was talking about. 

But there is a lot of capital ready to be raised, if you like. And so I do think that it will come back. But we do need a period of stability, so that people and investors in particular know what they're investing into. 

Krishna: Thinking of London in its broader role as a global financial centre. What's the feeling from clients? What are you hearing and seeing? 

Karim: Well, I think, you know, if you look at London as a broader role, first of all, it's an international financial centre. So, of course, the US also is an international financial centre. But one of the main attractors of the US is the domestic market. 

London is unique in that sense that it has that broader international space. So a lot of clients are looking at really when you're doing business that is much broader cross-border in particular, London is a pretty attractive market. 

The other part with London is the regulation. The regulation traditionally has been very consistent, very clear. And so people know what they're getting and that is also backed up with a very strong legal system, which is the backbone to a lot of financial services around the world. So clients do love those aspects of London. 

And final thing I would say is that is the availability of skills and in particular Professional Services related to the financial services that is in plentiful supply in London is one of the strengths of London. It’s backed up by the fact that it has strong education universities, but also a really long tradition. And those services are really one of the biggest exports that London has. 

And that strengthens London from the viewpoint of clients when they're looking at which financial centres to do business in. 

Krishna: So Karim, how's that going to change in the future? 

Karim: Well, one of the things that London's been really good at is innovation. And actually that continues to be the case, and it's not just London actually, it's the UK. London being the place where the innovators raise capital, but of course they're based all across the UK. I do think that's going to be one of the strengths of London going forward, and we need to nurture that innovation and help it grow by attracting more capital into the country. Foreign capital, domestic capital, patient capital that can help these companies grow and scale. I think that will be one of the key things for London in the future. 

Krishna: You mentioned innovation and fintech plays a big role in innovation in financial services. So, what role does London play in being a global leader in that space? 

Karim: Yeah, I mean, I'm glad you mentioned fintech because I think fintech is something that's been very much part of the financial services industry forever. For example, financial services have been the forefront of innovation. And London in particular has been a part of that. 

For example, the first ATM was actually in the UK and in London. So it's been there in our history. When you look at the statistics today as well, it's been a massive centre for attracting capital for fintech. 

So $11 billion in 2025, a year when it was tough to attract capital, but it was much higher than any of the European cities you can think of, but also places like China. So London is very much that place that people can raise capital. Of course, the US is another big destination for it, but London should be proud of what it’s achieved in that space. 

The other aspect in terms of fintech, other than raising capital, is the availability of skills, very strong skills in things like AI and new technologies. A lot of that innovation does go into financial services. And as a result, a lot of the innovation starts here in London and then spreads around the world. 

So we do need to nurture those technology skills and I'm pleased that the government's doing something about that too. 

Krishna: Karim, there is a sense that companies that are set to be the next unicorns are going to jump ship and go to the US. Is that accurate? Is that what you're seeing? 

Karim: Look, no doubt the US is a very deep pool of capital and investor capital available for companies looking to scale up and raise more capital. So of course, the US is a very attractive market. 

The other part of the US is that it's a very deep market in itself. So people wanting to sell into the US market are attracted to it. And of course, investors who invest in the US do understand that aspect of the US. And that drives sometimes better valuations, which is what's attracted companies not just from the UK but around the world to list in the US. 

But I think if you look at what's happening now, actually London is a pretty attractive investment option. Firstly, it’s an international centre. It's not just about the US market, but also about the international market. A lot of unicorns want to do business in Asia, for example, and look to London as the place that they could perhaps raise capital, attract investors. 

The key for me is for us to attract the right investors, both domestically and overseas coming into the UK, making the environment right for them. 

Krishna: In such a volatile sort of environment, what's needed to safeguard the city and lay those foundations for growth? 

Karim: Yeah look, I think it's important to firstly change the narrative of the city. I think there's too much narrative on the negative, but really we must be focusing on what's the strengths of the city and how we can make a positive difference. So I think firstly, that narrative is very, very important. 

Alongside that, we do need some visible successes and people love the equity markets and IPOs. So we do need some really good success in that space. So I think it's important for us to focus on that, look at our homegrown unicorns and make sure that we make the environment right for them to list in London. 

But in order for that to happen successfully, we do need capital coming into London. And in particular, helping people scale up requires patient capital. So we do need to make sure that it's not just the equity market, the public equity markets, but also the private markets, including things like pension funds, who do provide a lot of patient capital. 

So that package would really make London a much more stable environment for people to invest in. 

Krishna: You mentioned patient capital, can you tell us what that is? 

Karim: Well the way I look at patient capital is capital that's there to help people in the longer term, medium to longer term, to grow their business. So it's not about quick exit, provide capital, make a quick return and get out. So I think that long term nature or medium at least nature of that capital is important. 

Krishna: In terms of foreign investment, what's the international perspective of the UK as a place to invest? 

Karim: Well, I think contrary to popular belief actually people are really positive about the UK and London. One of the reasons they are is because they see London as a leader, a world trendsetter, and lots of innovation, but also on setting the standard on things like policies and regulation. 

They also like the stability of regulation and law. And they do find that there are people, investors coming in from all parts of the world so it’s a good place to do business. 

However, I think a lot of them are a bit disturbed by some of the narrative, and sometimes they're worried that changes to policies could chop and change between one spectrum to another. So I think it's important we grab the narrative, we’re consistent about what we do, and we continue therefore to attract them to London. 

Krishna: Yeah, so certainly I'm seeing a really positive trend. What should the story be for London? What should we be shouting about London? 

Karim: Yeah look, I think first of all, financial services is embedded in London, but also across the whole of the UK. Very few countries can say that. Secondly, we have a lot of stability, stability in regulation, stability in law, interpretation of law and the rule of law. So I think that's another really positive thing. 

Third is skills, we have the skills here to do financial services and also all related things such as legal, accounting and other professional services. The skills are really important. We also have skills not just for today but for tomorrow, such as things like technology, but also our universities. We have four of the top ten universities around the world, so plenty for London to shout about. 

Some of the other things that London can really shout about is first of all it sets the global standard in financial services. And those standards in financial services is what almost all countries in the world use today. London should be really proud of that. 

It invests in small businesses all across the country. And those businesses thrive because of capital that is raised in London. But not only that, it's actually one of the few sectors that has a trade surplus for the rest of the world. And finally, alongside the trade surplus, London is one of the sectors that really exports services. 

Krishna: So is a strong London good for the rest of the country? 

Karim: I would say absolutely, yes. And this is not just about London, it's about the whole country. So, for example, professional and related financial services across the UK generate about 12% of the GDP. They contribute 110 billion to the tax to the exchequer. They also have 2.4 million jobs created in the UK, two thirds of which are outside of London. 

So this is not about London, this is about London leading the way but for the whole country. And therefore I think it's important to recognise the financial services and the related services to financial services are very much about the UK and putting the UK on the map. 

One of the other aspects of this is that London links the whole of the UK to the rest of the world for trade, for financial and professional services. So it's a really important connecting point for the UK as a whole to the rest of the world. 

Krishna: So Karim, that's our 15 minutes nearly up. We always ask one question of our guests, and that is what's the biggest takeaway for our listeners? 

Karim: Look, I think there's a lot of positive to talk about in London, so I think we do need to change the narrative. We need to change the narrative to what can be done and why London is important in that story. Also, there are of course things that we can improve. So let's talk about that in terms of how we can improve, not what is wrong. So I would say talk positive, talk the narrative up, but also recognise the things to improve. 

Krishna: Thanks Karim for joining us. That's our 15 minutes up. Don't forget, you can catch all of our episodes on Apple Podcasts, Spotify and YouTube. Join us next time for The Insight in 15.