In a striking paradox that encapsulates the trajectory of the Square Mile over the past decade, JPMorgan is preparing to build a new tower in London's Canary Wharf capable of accommodating up to 12,000 employees — a commitment that UK Chancellor Rachel Reeves described as a "multi-billion-pound vote of confidence" in London's financial district. The expansion comes a full decade after the bank's chief executive Jamie Dimon warned, ahead of the 2016 Brexit referendum, that the bank might relocate 4,000 jobs out of the country, as part of a wave of similar warnings issued at the time by a number of senior financial executives.
Employment and profit figures exceed expectations
Current employment data supports this relatively optimistic picture: employment in the City of London is approaching an all-time high, with banks recording record profits. According to the City of London Corporation, approximately 676,000 people currently work in the City — an increase of more than 25% since 2019. This recovery reflects growth that is "faster and stronger" than expected after Brexit, according to local business owners such as Søren Jessen, who runs a restaurant overlooking the Bank of England.
The deeper picture
Despite this apparent momentum, data reviewed by Reuters, alongside interviews with former officials, paints a more nuanced picture of a financial centre that has lost part of its global dominance. Michael Mainelli, who led the City in his capacity as Lord Mayor of London in 2023 and 2024, says Brexit has undoubtedly weakened the City's standing, pointing to the migration of jobs to cities such as Paris and Dublin. He notes at the same time, however, that Europe as a whole has lost ground to the enormous growth of Asian financial markets, making Britain far from the only loser in the equation.
To maintain services for clients in the 27-member European Union, British firms that lost their financial passporting rights were forced to relocate around 40,000 jobs to alternative European financial centres, according to City of London Corporation estimates.
Market share decline
Britain retains its position as the world's second-largest destination for foreign capital after the United States, hosting more than £12 trillion (approximately $16 trillion) in foreign direct investment, portfolio investments, and cross-border deposits as of end-2025, according to IMF data cited by Barclays. However, its share of total foreign capital has fallen from 8.6% in 2015 to 7% in 2025, while the United States' share rose from around 20% to 25% over the same period, driven primarily by strong demand for US equities.
More significantly, according to research firm New Financial, Britain has lost market share in 10 out of 12 categories of international finance since 2015, including foreign exchange trading, equity offerings, and managed assets. William Wright, the firm's founder, describes Brexit's impact on London's financial sector as akin to "the UK breaking its arm" — tangible damage, but not catastrophic — while acknowledging a degree of "self-inflicted harm."
Supporting factors
Several factors have helped cushion Brexit's negative impact on the sector, most notably rising interest rates, which doubled banks' lending returns. The Labour government, after coming to power in 2024, also moved to ease the sector from regulatory constraints put in place following the 2007–2008 global financial crisis. Banks, with the backing of Reeves, were spared new taxes and received regulatory concessions on capital requirements. The insurance sector also benefited from Britain's revision of European solvency rules by reducing administrative costs and easing mandatory reserve restrictions, resulting in an increase in total premiums written, according to the London Market Group.
New investments bolster confidence
Alongside these developments, JPMorgan announced this month that it is expanding its $1.5 trillion security and resilience initiative to include Britain, as well as expanding its campus in Bournemouth at a cost of between £300 million and £350 million. In a parallel move, Citigroup announced an investment of £1.1 billion in its UK operations — signals reflecting renewed institutional confidence, even amid the broader structural decline of London's global financial standing.
Disentangling the impact of Brexit from the successive wave of global crises — from the Covid-19 pandemic to the wars in Ukraine and the Middle East, through to US President Donald Trump's reshaping of trade and security agreements — remains an ongoing analytical challenge, making any definitive assessment of the true "cost" of Brexit for Britain's financial sector far more complex than surface-level figures alone can reflect.