A Portrait of The City of London: Past, Present and Future

The City of London is one of the world’s wealthiest, oldest and most influential financial centres. Located in the heart of the UK’s capital and nicknamed the Square Mile, this self-governing area is a key driver of the economy, generating £70 billion in economic output annually. It’s home to the world’s largest foreign exchange market, insurance companies and the London Stock Exchange, the most international exchange on the planet. And more than 500 banks have their offices here.

The City is also a world-leading business hub that makes a sizeable contribution to the wider economy, generating £1.2 billion in business rates. That’s more than Birmingham, Leeds and Manchester combined. It’s where entrepreneurs raise money to get their ideas off the ground and where established companies seek capital to help fund growth and job creation. 

Coffee And The Beating Heart of Business And Finance

Founded in the first century, a few years after the Roman invasion of AD43, the City is the oldest part of London and predates the United Kingdom. It shouldn’t be confused with the rest of the capital, a bustling metropolis of around nine million people. The City is a separate entity, a 1.12 square mile parcel of land with its own police force and a mayor who is distinct from the Mayor of London. Its governing body is the City of London Corporation, long considered the home of free enterprise. 

This centre of global finance and business has an extensive history as a nucleus of wealth, power and prestige. For centuries it loaned money to kings and queens, and its 17th-century coffee houses gave birth to some of its most important institutions. During the rise of trade and commerce at this time, London’s coffee houses were lively meeting places for merchants and traders. Coffee was a fashionable new drink of the professional classes, and it fuelled intellectual discussions and business deals where great fortunes were won or lost.

Britain’s first stock exchange got its start in Jonathan’s Coffee House in Exchange Alley. Broker John Castaing spent many an hour here and, in 1698, began posting a list of stock prices, bullion prices and exchange rates. Many other coffee houses in the City soon relied on his prices. Jonathan’s burned down in 1748, and a new building was erected without delay taking the name of The Stocks Exchange. Today the London Stock Exchange is one of the largest stock exchanges in the world, carrying out more than 880,000 daily trades.

Lloyd’s of London also owes its foundation to the humble roast. Edward Lloyd opened a coffee shop in Tower Street frequented by local merchants, sailors and shipowners. He found it profitable to rent out tables to businessmen who sold insurance to ship owners in the event their vessels didn´t return. Another important milestone around this time was the founding of the Bank of England by Royal Charter in 1694.

The Big Bang

One of the most significant developments in the City’s history was the deregulation of its financial markets in 1986. So momentous was the move that it was dubbed the Big Bang. There were three significant changes:

  1. Minimum fixed commissions on trades were ended, allowing more competition.

  2. Foreign firms were permitted to own brokers, opening the market to international banks.

  3. The split between those who advised investors and those who traded stocks and shares was ended, allowing takeovers and mergers.

 This shake-up brought the City into the 21st century and helped it become the dominant financial centre it is today.

Global Business Hub

The City is equally well known for its business activities, offering unparalleled business opportunities to companies large and small, new and established, no matter where they’re located. They can take advantage of the world’s most international and connected financial centre, which offers easy access to global capital through the Stock Exchange. Listing rule changes in the near future will make it even easier for foreign companies to raise capital.

Businesses also make a beeline for the Square Mile because of the breadth and depth of its talent pool. It has one of the country’s youngest, most highly skilled and international workforces. Almost 50% of City workers hail from European Economic Area countries or the rest of the world, and it has more workers aged between 22 and 39 than England and Wales.

Then there is world-class support, advice and information provided by the City of London Corporation. Enterprises from start-ups to established firms have access to a range of resources such as economic research and intelligence and guidance on business continuity planning. This was never more needed than when coronavirus shook the world. 

Resilience And Opportunities In A Pandemic Era

In common with many other places, the City was hit hard by COVID-19. The public health crisis emptied its streets, shops and buildings of workers and tourists. For a while, the global financial powerhouse was a shadow of its former self as businesses asked staff to stay at home to work. But coronavirus also presented the Square Mile with a fantastic opportunity to reinvent itself and shape the course of its future. It intensified the need to proactively respond to economic and social trends accelerated by the pandemic. These include the digitisation of business and society, changing consumer expectations, climate change and changing demands on urban centres.

Recognising the need to adapt and evolve, the City of London Corporation launched a Recovery Taskforce in November 2020. Its mission was to identify ways to ensure the UK´s financial capital remains internationally competitive and locally vibrant. The taskforce consulted thousands of members of the public and over 250 senior leaders. It published its recommendations in The Square Mile: Future City – a five-year action plan designed to create the most inclusive, innovative and sustainable business ecosystem in the world.

To fulfil its vision for the future, the report´s authors presented priority activities in three principal categories: 

  1. A world-class business ecosystem that will enable high-potential businesses to start, adapt and grow and ensure opportunities are available for everyone, especially within financial services, professional services and technology.

  2. A vibrant offer packed with retail, hospitality, culture, tourism and recreation opportunities for workers and leisure and business visitors.

  3. Outstanding environments, including collaborative, flexible workspaces, world-class street and public places and stable, resilient buildings and infrastructure.

Bold Strides Into The Future

COVID-19 hasn’t been the only threat to the City´s ongoing success story. Brexit loomed large for several years and became a reality on January 31, 2020. Yet, despite the worst predictions of doom-mongers, the fallout has been nowhere near as bad as feared.

 The mass jobs exodus and loss of business haven’t occurred, and while the long-term impacts are still unknown, the Square Mile is striding confidently into the future. Nowhere is this more evident than in the raft of planned new skyscrapers that are either under construction or have been given the green light. They represent a global financial and business hub that is the same as it ever was - bold, ambitious and open to opportunities.