What does the future hold for financial services in the UK? We might not have a crystal ball, but we do have a glimpse at the next few years, thanks to the Government’s financial statement.
This week, chancellor Rishi Sunak made a statement outlining his – and the Government’s – plans for revamping and reinvesting in our finance sector. The aim is to ensure that the UK remains a global financial centre, which is essential for creating jobs and helping to keep our economy strong and internationally credible.
Of course, the statement was also given in the context of COVID-19 and Brexit, two external factors that will have a significant impact on what the UK can achieve. Britain’s exit from the EU, in particular, is considered by many to put our economy on shaky grounds.
However, in focussing on green finance and financial technology, the Chancellor hopes that he can ensure a positive outlook for the next few years. Here’s a summary of the announcement.
Broadly speaking, green finance means ensuring that financial organisations are operating in a sustainable and environmentally friendly way. One of the big announcements from the financial services statement was the introduction of a new Sovereign Green Bond. This is money that will be used to fund projects tackling climate change, helping to make our industry more sustainable while simultaneously producing jobs across the country.
The government is also planning to make businesses and financial services companies more accountable, with companies being told that they will need to start making mandatory climate-related financial disclosures. This will help to capture the material impact that climate change is having not only on the economy and the earth.
The chancellor used the statement as an opportunity to underline the UK’s commitment to investing in new financial technology. Stablecoins were mentioned as a particular area of interest. These are a type of cryptocurrency that are considered more stable than traditional cryptocurrencies such as bitcoin.
They’re backed by a reserve currency (e.g. the dollar or the pound), but also offer the security and privacy associated with cryptocurrency. The government is keen to look at how they can regulate stablecoins and incorporate them into the UK’s economy.
These are just proposals at the moment – we’ll need to wait and see which areas of the statement become a reality over the coming months and years. The plans are certainly ambitious, and aim to put the UK into a strong position as we leave the EU. You can read more about the plans on the Government website, here.
If the plans become a reality then it could be great news for job seekers, as a booming financial services sector would mean more opportunities for work. However, bringing it to life will rely on heavy investment in infrastructure and buy-in from a range of different businesses and industries. We’ll be watching closely to see how theses proposals take shape, and will share key updates as they become available.