The UK financial services sector contributed over a tenth of the country’s total economic output in 2025, outpacing the productivity of the broader economy.
The industry provided a £290bn boost to the UK’s real GDP in 2025, representing around 11 per cent of total output, according to TheCityUK’s latest UK Key Facts report.
Productivity across the sector, which includes related professional services such as accounting, was 2.6 times higher than the whole economy measured by total values of goods and services produced per hour.
“Beyond these headline macroeconomic indicators, the data in our report underline the industry’s broader enabling role within the economy,” wrote TheCityUK’s chief economist Anjalika Bardalai.
She added that maintaining the competitiveness of the industry remains critical at a time when the broader economic environment continues to be “shaped by geopolitical developments, technological change and rapidly evolving market conditions.”
The government has framed its economic plan around the financial services sector, which Rachel Reeves has said sits at the “heart” of its growth agenda.
In the King’s Speech, the government launched its Enhancing Financial Services bill, aiming to boost the industry through regulatory reforms and help unlock a deeper pool of capital for small businesses.
Major UK banks increased their lending to smaller businesses over the last year, with around a third of the £582bn in outstanding loans from UK banks to businesses as of February 2026 going to small- and medium-sized enterprises.
Mortgage lending surged 20.4 per cent year-on-year in 2025 to £296.2bn, rebounding from the restrictive grip of high interest rates that peaked at 5.25 per cent in 2024 before falling to 3.75 per cent by the end of 2025.
TheCityUK’s report said the recovery was “supported by the Bank of England’s decision in August 2024 to cut interest rates for the first time since 2021.”
The shifting monetary climate also drove savers toward more guaranteed income streams, pushing the total amount spent on individual pension annuities to a post-2014 high of £7.4bn in 2025.
The report also highlighted a trend of banks moving away from direct lending and instead acting as “strategic partners and financial backers” to private credit funds, with the UK’s private credit market growing at 43 per cent between 2013 and 2024.