London Isn't Losing Its Grip on Talent. The Numbers Say It's Tightening It.
The "London is in decline" story has been written so many times it now reads as fact. From where we sit — running senior searches across the City every week — the data tells a different story. Here's what the talent market actually looks like in 2026 and why the obituaries keep getting it wrong.
Ten years ago, soon after the Brexit vote, the boss of the London Stock Exchange warned that the City might lose 100,000 jobs. By 2017 he had raised the figure to 232,000. It made for a frightening headline. It also never happened. Financial services still employs around 1.1 million people in Britain — the same as before the vote — and now generates roughly 8% of the economy, about £224bn a year.
Look at the Square Mile itself, and the picture is better still. Some 225,000 people worked in finance there in 2024, around 36,000 more than in 2019 — growth delivered through the combined shock of Brexit and a pandemic. A further 181,000 work in the law, accountancy and advisory firms that cluster around them, up by 51,000 over the same period. That is not the footprint of a market losing its grip on talent. It's the footprint of one quietly expanding while everyone narrates its decline.
Sentiment is the leading indicator, and it has turned
Numbers matter in the City. The mood matters more, because hiring runs on conviction and conviction runs on confidence. On that score the shift is unmistakable. Z/Yen's closely watched index of global financial centres had London slipping to a distant second behind New York by 2020; it now rivals New York again – a recovery its authors attribute less to hard metrics than to improving sentiment among the people who actually allocate capital and headcount. As one US-headquartered asset management boss put it: "Half of my staff want to move to London."
You can see the same thing in firm behaviour. Goldman Sachs and Morgan Stanley kept their European headquarters in London; JPMorgan is designing a bigger one and has reportedly begun moving some roles from Paris back to London. The post-Brexit script had talent flowing the other way. We don't see it that way.
The depth is still here — and depth is what talent buys
The decline thesis quietly assumes somewhere else is winning. In places, it is: Amsterdam took share-trading volume; Stockholm has been the hotter venue for fresh equity; and banks have built real trading floors in Paris. Those are genuine losses and worth naming. But they haven't moved the centre of gravity. Across the international business lines that define a global hub, London remains the world's premier centre in seven of twelve major categories. It is unrivalled in foreign exchange, insurance and derivatives – roughly half of global interest-rate derivatives and 38% of FX derivatives clear through London, and Lloyd's has pushed its share of the speciality insurance market from 42% to 45% over five years.
This matters for talent more than any single salary number, because depth compounds. The concentration of firms, capital, advisers and specialist expertise within a few square miles is the thing rivals find genuinely hard to replicate — and it's exactly what an ambitious senior banker is buying. In London they are one conversation away from their next three moves. That optionality never shows up in a cost-of-living spreadsheet, which is precisely why the spreadsheet keeps mispredicting where people go.
The bonus-cap exit reset the maths at the top
Here's the detail that should have ended the "talent is leaving for Europe" argument and somehow didn't. When the UK scrapped the EU bonus cap, it pulled the two markets apart at exactly the level where senior talent is won and lost. UK-regulated firms can now pay variable compensation at multiples of base salary. The EU-regulated banks that anchor Paris and Frankfurt remain bound by the old two-to-one limit.
So while junior and mid-level packages have compressed once you net off tax and cost of living – that's real, and it's where the "the gap is narrowing" headlines come from – the senior end has moved the other way. For the managing directors and rainmakers who actually drive a franchise, London now offers an upside ceiling its continental rivals are legally prohibited from matching. Talent follows that.
Where the bears have a point
We'd be doing you a disservice to pretend it's all one way. London's record as a capital of capital is genuinely mixed. The share of global assets run by British investment managers has slipped from 13% to 10% in five years. The Stock Exchange now wins barely any international listings — about 1.2% of the global total — and on that front the competition increasingly comes from the east, not the continent. In the finance most tied to the domestic economy, the City's share has been shrinking in most categories.
That's the honest counterweight. But notice what it isn't: a talent exodus. Weak listings and a softening asset-management share are capital-flow problems, not headcount ones — and even there, the wind is shifting. Listing reforms under the 2023 Financial Services and Markets Act are starting to land, pension capital is being pushed toward riskier assets, and overseas money is buying in. Apollo and Brookfield have acquired British insurers in the past year, and Nuveen has agreed to buy Schroders. Inbound capital tends to be a leading indicator of inbound jobs.
What this means if you're hiring
The mistake we see most often is treating London as a market you can win on reputation alone. You can't anymore — but not because talent is heading for the exits. It's because the talent that's here has options, knows it, and reads an offer more carefully than ever.
So lead with what London uniquely offers: depth, scope, optionality and a variable-pay ceiling no EU-regulated rival can touch. Stop benchmarking London packages against continental gross numbers — post-bonus cap, two offers with the same headline can carry completely different upside, and the structure is now the pitch. And take retention as seriously as hiring, because in a market this competitive your best people are the ones everyone else is calling.
London isn't losing the war for talent. It's running a tighter, richer, more competitive version of it — buzzing again, expanding its headcount, and rivalling New York on confidence. The firms still assuming their name does the work will keep losing good people to the ones that have noticed the market has changed.
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*Croft & Co is a Franco-British executive search firm specialising in senior appointments across investment banking and asset management in the UK and France. More from our team at [croftandco.com/industry-insights]
