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Last year saw the largest exit of companies from the London Stock Exchange since the global financial crisis.
According to accountants EY, 88 companies, including Paddy Power owner Flutter, travel group Tui and Just Eat, have left the London market for exchanges in the United States and Europe.
It comes amid fears that the capital will lose relevance as a place to do business following Britain's departure from the European Union.
Last month, former London Stock Exchange chief Xavier Rolet said there is a “real threat” of more UK companies moving their listings to the US as trading declines in London and grows there. .
The loss of 88 companies is the largest since 2009, EY said. During the same period, there were 18 new listings. where companies sell shares to the public for the first time.
The contraction of London as a global market has been constant. Twenty years ago, when banks, manufacturers, oil companies and pharmaceutical firms dominated the charts of the largest companies, UK-listed shares accounted for 11 per cent of the global market. Now it's about 4 percent.
The trend has to do with both US growth and London's contraction, as the US and its giant tech stocks have dominated global markets.
The entire FTSE 100 index of top UK-listed companies, including household names Tesco, HSBC, Shell and British Airways owner IAG, are collectively worth around £2 trillion.
By comparison, New York-listed Apple alone has grown to a value of $3.72 trillion (£2.97 trillion).
The next largest companies in New York helping the US market dominate all competition are all tech companies worth more than $1 trillion, including Amazon, Tesla, Microsoft, Meta, Google-owner Alphabet, and Nvidia .
No London-listed company is worth more than £165bn, or a small percentage of Apple's size.
To a large extent, this shows that to compete, a stock exchange needs large technology companies. Britain produces some, but the biggest example, chip designer ARM, chose New York to list its shares in 2023 when its owner, SoftBank, sold its shares.
Does this matter? Companies tend to want to be close to their shareholders, which could drive more companies away from Britain, costing them jobs and tax revenue if they change where their shares are listed, said Professor David Bailey of the University of Birmingham.
If London shrinks, it could also have an effect on its broader appeal as a place to raise money.
“Ultimately, if London is not seen as an attractive market for larger companies to list their shares, this raises a question about whether UK companies can attract money,” he said.
London is also home to vast debt markets, as well as metals trading markets, a complex insurance market and other services needed by large businesses.
If the core reason for being based in London starts to fade, these other markets could be affected too.
The government will be keen to prevent this. While Britain's dependence on the City has been seen as a weakness since the financial crisis, it is still home to hundreds of thousands of well-paid jobs. On top of that, the Treasury collected £79 billion in tax revenue from the financial sector in 2023, according to PwC research.
At the same time, London regained its crown as Europe's largest stock market this year, overtaking Paris.
London lost its first place in 2022 after Brexit and former Prime Minister Liz Truss' mini-budget. But the recent political unrest in France has also affected its stock market.
While competing with New York may now seem like a dream, maintaining London as Europe's financial capital is much more realistic.
