By Fiona Morrill, Financial Services Research Officer in the Economic Development Office
Recently the House of Commons debated the future of financial services, and the role it plays in supporting the UK economy, and we’ve been informing the debate by looking at the contribution financial services makes to other sectors. This contribution comes not only from investing in and financing their activities, but more widely by purchasing their goods and services.
In 2015, financial services spent £138bn on goods and services from other sectors – equivalent to 7% of total demand for those goods and services, and up from £136bn in 2014. This is a key part of its contribution to the wider economy, alongside the £72.1bn it generated in tax receipts for the UK government in 2016/17.
The contribution FS makes is particularly strong in highly productive sectors like tech services and related professional services, buying around a quarter of total outputs in many of those activities. FS accounts for 22% of the total demand for computer programming, 26% of demand for telecoms, and 20% of demand for information services, while it buys 24% of total accounting and tax services, and 18% of legal services. This illustrates the links between FS and other knowledge-intensive, innovative and productive sectors.
The infographic below looks at the contribution made by financial services in buying these goods and services, supporting jobs and growth in other sectors, alongside the role of related professional services (accounting, legal services and management consultancy) in doing the same.
While we might not be able to predict the future of financial services, facts like these are crucial to the debate around how the sector boosts jobs and growth in its own right, alongside playing a key role boosting innovation and productivity right across the UK economy.
Source: ONS, Input-output supply and use tables, 2017