London has strengthened its position as a leading global financial hub, closing the gap with New York City in the race to be crowned the world’s top financial centre, according to the latest Z/Yen Global Financial Centres Index.

The index, which ranks 121 financial hubs worldwide, showed London holding firm in second place with a score of 750 points, a three-point increase from the previous ranking in March.

New York remained at the top with 763 points, although its score dipped by one point over the same period.

The gap between the two cities has narrowed by 15 points over the past 18 months, suggesting a growing competition between the transatlantic rivals.

New York has dominated the biannual rankings since overtaking London in September 2018. However, London’s gains in recent months have put it in closer contention for the title of the world’s preeminent financial centre.

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The broader financial landscape reflected stability, with the average rating of centres in the index slipping just 0.42% since March. This suggests limited change in overall confidence within the global financial sector, despite slow economic growth and easing inflation.

The top five financial centres remained unchanged, with Hong Kong moving ahead of Singapore to reclaim third place, and San Francisco rounding out the top five.

Dublin was the standout performer, leaping 11 places to number 14, up from 25 in the previous index. However, other European hubs, including Frankfurt, Paris, Zurich, Geneva, and Luxembourg, saw declines in their ratings.

In the rapidly evolving fintech sector, New York also retained its lead, followed closely by London. Shenzhen made a notable move, overtaking San Francisco for third place by a single rating point.

Meanwhile, Hong Kong joined Washington DC, Los Angeles, Chicago, Singapore, and Seoul in the top 10 fintech centres, replacing Shanghai, which slipped to number 15 position.

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"Geopolitical risks are identified as the greatest challenge facing financial centres and their development," said Mike Wardle, chief executive of Z/Yen. "However, confidence in leading international financial centres remains strong, and many improved or maintained their rating in this index."

The index’s top 10 was rounded out by Chicago, Los Angeles, Shanghai, Shenzhen, and Frankfurt, with the latter two re-entering the group, replacing Geneva and Seoul.