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London's financial services sector creates a trading surplus of £43bn

Margareta Pagano
Sunday 10 May 2009 00:00 BST
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Britain's trade surplus in financial services rose to a record £43bn last year despite the recession because of the growth in banks' spread earnings from foreign exchange, derivatives and securities transactions.

In its six-monthly report last week, International Financial Services London (IFSL) said that the City's financial surplus was also helped by its strength in foreign exchange trading. The report showed that the UK banking sector saw total assets rise by 14 per cent to £7.9bn. The UK also took a large slice of the international bond markets, with nearly a third of net issues compared with 17 per cent in 2007 while some 18 per cent of all global hedge fund assets – $270bn – were managed in the UK in 2007.

Duncan McKenzie, IFSL's economics director, warned that the new 50 per cent top-rate tax might harm London's ability to keep its position.

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