From 2013 to 2023, the Financial Services and Insurance sector in the UK has witnessed a gradual decline in its Gross Value Added (GVA) as a percentage of GDP. Moving from a value of 6.8 in 2013 down to 5.6 in 2023, the industry endured fluctuations influenced by various economic conditions. Year-on-year variations over this period exhibit both slight growth spurts and notable declines, with a Compound Annual Growth Rate (CAGR) illustrating an average yearly decrease. Notably, the period from 2018 to 2023 saw consistent albeit modest declines, with a 1.35% annual dip.
Looking forward from 2024 to 2028, the forecast anticipates continued depreciation in GVA, albeit at a slower pace, projecting a downward CAGR of -0.74% over the next five years. By 2028, this is expected to lead to a further decrease, with a forecast GVA of 5.3% of GDP, representing an overall reduction of 3.64% across this period.
Future trends to watch for include technological advancements in financial technology (FinTech), regulatory changes, and the broader economic climate's impact on financial services. Understandably, a swift embrace of digital transformation, coupled with policy adaptations, may stabilize or even reverse the downward trend observed in recent years.
