The Value of Capital Markets to the UK Economy report
21.05.2020 | Economy
The Value of Capital Markets to the UK Economy report - commissioned by BNP Paribas in collaboration with New Financial - analyses how UK companies use the capital markets, and the role they play in supporting jobs across the country.
The report finds that capital markets channel investment in the UK economy to help finance companies and ultimately drive growth, investment, jobs and prosperity. This report measures the direct economic contribution that the capital markets make to the ‘real economy’ in terms of employment and investment for companies of all sizes. The capital markets remained a critical source of financing during the COVID-19 pandemic, and UK corporates have raised £30bn in the bond and equity markets since mid-March 2020.
Anne Marie Verstraeten, UK Country Head, BNP Paribas Group said: "BNP Paribas has been present in the UK for more than 150 years. We are a long-term partner to British business and very active in the UK capital markets. Most recently, the COVID-19 health crisis has hit the economy hard and the capital markets have had to step up to support the economy and society in an urgent and meaningful way. The report shows during this time of crisis, a high volume of corporates have been active in the debt and equity capital markets, across a range of sectors.
As we begin to look ahead to what will undoubtedly be an evolving new order, it is evident that capital markets will continue to play a fundamental role in ensuring a sustainable and responsible recovery, centred on rebuilding a greener, fairer and more resilient economy.”
Key findings from the report include:
- Capital markets are hugely relevant to UK plc and UK Ltd
An estimated 90% of UK companies with revenues of more than £200m use the capital markets to help raise capital, invest in or restructure their business and manage risk
- Companies that use the capital markets play a vital role in the UK economy
They employ an estimated 5.5 million people across the UK – roughly a fifth of the private sector workforce
- During the COVID-19 crisis, capital markets have played an important role in supporting the UK economy
In the midst of the COVID-19 pandemic, 150 UK companies raised a total of circa £30bn in the corporate bond and equity markets between mid-March and end-April 2020.
- Capital markets are not just for large companies
An estimated a 14,000 UK companies with revenues of less than £200m used the capital markets between 2014 and 2018.
- Capital markets add vital capacity to corporate funding
UK companies raised nearly £750bn in the bond, equity and leveraged loan markets between 2014 and 2018, representing a big boost to annual flows of gross bank lending of around £300bn a year in the UK.
- Large UK companies have combined defined benefit pensions assets of around £750bn, which aggregates the pension savings of millions of people into a valuable pool of capital that can be put to work in the economy.