Two of Wall Street’s biggest banks have announced major expansion plans in the UK, hours after they were spared increased taxes in Rachel Reeves’s autumn budget.
JP Morgan on Thursday revealed plans to build a 3m sq ft tower in London’s Canary Wharf, which will serve as its new UK headquarters and house more than half of its 23,000 UK staff. It is understood the project will cost £3bn.The US rival Goldman Sachs said it would be expanding its Birmingham office, hiring 500 staff in a move that would more than double its workforce in the city.
The news came only hours after banks dodged a tax raid in the chancellor’s budget, having lobbied hard against a higher levy that lenders argued could force them to curb lending and cancel out the benefits of regulatory reforms, meant to spur growth. Reports emerged earlier this week that the Treasury had asked the sector to issue supportive statements about the budget, in exchange for being spared a tax rise.
In a press release announcing the new tower, Reeves said she was thrilled JPMorgan had chosen London for the development, labelling it a “multibillion-pound vote of confidence in the UK economy”.
When asked by on the BBC’s Today programme whether the banks’ investment plans were linked to the lack of bank taxes, Reeves said: “The budget that I delivered yesterday is getting investments from some of the biggest companies in that world, here in the UK. Those companies can invest anywhere. They are choosing Britain because they liked what they heard in the budget yesterday.”
A source close to JP Morgan said the bank had been working on the announcement for months and that the investment in a new headquarters was a long-term decision rather than related to any individual budget. With markets on Wall Street closed for Thanksgiving, the bank had a quieter period to make the announcement, they added. Jamie Dimon, JP Morgan’s chief executive and chair, said: “London has been a trading and financial hub for more than a thousand years, and maintaining it as a vibrant place for finance and business is critical to the health of the UK economy.
“This building will represent our lasting commitment to the city, the UK, our clients and our people. The UK government’s priority of economic growth has been a critical factor in helping us make this decision.”
JP Morgan said that, overall, the project was expected to inject almost £10bn into the UK economy, when accounting for the building costs, as well as the suppliers, business activity and employment that the project would stimulate.The new headquarters will take about six years to build, and is due to be designed by the British architects, Foster + Partners, which also designed JP Morgan’s recently completed global headquarters at 270 Park Avenue in New York.
The news comes only months after the the bank announced a £350m investment in its Bournemouth campus.
Goldman said its Birmingham expansion plans were part of wider investments in tech and AI. A spokesperson said: “We are increasing our financing activities to critical parts of the economy where we see substantial opportunities to deploy capital, including in AI and digital infrastructure, with several billion pounds ready to be committed.” credit:https://www.theguardian.com/business
