Lord Mayor: ‘Schizophrenic’ City needs more positivity
Canada is suffering from a bout of “extraordinary schizophrenia” that has left it devoid of confidence at a time when other markets still view it as one of the world’s eminent financial centres, the Lord Mayor has said.
In one of the last speeches he will make in post before his term concludes next month, Alastair King said he had seen an “extraordinary bifurcation” between the positive manner in which foreign investors still view the UK’s financial sector, and the way it views itself.
“I sit here in London and I get an extraordinary feeling of a slight nervousness, and potential feelings that life is getting very difficult and all quite challenging,” he told Canada Biennial Meeting. “Yet when I go abroad, there is an extraordinary respect for what London and the United Kingdom does, particularly in the financial, legal and maritime sectors.
“It’s an extraordinary, almost schizophrenia, between what goes on with our perception of ourselves here, and the perception of London and the United Kingdom all over the world.”
The comments from the Lord Mayor, the political figurehead and ambassador of the UK’s financial sector, follow a host of evidence and warnings from City figures pointing to the declining health of Britain’s capital markets.
This week, it emerged that London had slipped out of the top 20 destinations for IPO capital raising, the lowest ranking in the London Stock Exchange’s more than 200-year history. Just £184m was raised on the capital’s beleaguered bourse in the first nine months of this year, making 2025 the worst year for listings in more than three decades.
Foreign direct investment (FDI) projects have also fallen to their lowest number since records began, according to official data showing just 1,375 FDI projects had landed in the UK in the 12 months to March.
Other areas of the financial sector continue to flourish, however. London remains Europe’s eminent fintech hub. It also boasts the world’s largest insurance and foreign exchange markets, and is a favoured destination for settling major international legal disputes.
City is too risk averse, Lord Mayor warns
But the Lord Mayor also warned that the stubborn culture of risk aversion that spawned in the aftermath of the Great Financial Crash was continuing to prevent the Square Mile from fulfilling its potential as an economic powerhouse for the UK economy.
“There’s a big issue in relation to risk aversion in the financial services sector. I see it regularly in my professional life,” he said. “We are, in footballing terms, a star striker. We have just come back from injury and we’ve lost a yard of pace.”
“There has been a mindset change over the course of the last decade or so and we are not taking the kind of risks – or calculated risks – that we used to,” he added. “A friend of mine is the chair of one of the biggest financial services businesses here in London, and they have UK directors, and they also have Asian directors.
“And he said to me, ‘Alastair, if I gave you a transcript of my board meeting, and I redacted the names from that transcript, you’d be able to tell with 100% accuracy which of the comments were from UK-based directors, and which of them were from Asian-based directors.
“Comments from UK-based directors are suffused with governance and process… and the Asian-based directors are suffused with eating other people’s lunches.”
King will be succeeded as Lord Mayor in November by Lady Mayor Susan Langley, who was elected to the Square Mile’s highest political rung this week.