US banks announce UK expansion projects hours after budget | Banking

Two of Wall Street’s biggest banks have announced major expansion plans in Britain, just hours after Rachel Reeves bailed out tax rises in her autumn budget.

JP Morgan on Thursday announced plans to build a 3 million square foot tower in London’s Canary Wharf that will serve as its new UK headquarters and house more than half of its 23,000 UK staff. It was learned that the project will cost 3 billion pounds.

US rival Goldman Sachs said it would expand its Birmingham office and hire 500 staff in a move that will more than double its workforce in the city.

The news came just hours after banks dodged a tax raid on the chancellor’s budget, lobbying hard against a higher tax that lenders claim could force them to cut lending and undo the benefits of regulatory reforms to stimulate growth.

Earlier this week, news emerged that the Treasury had asked the industry to make supportive statements about the budget in exchange for avoiding a tax increase.

In the new tower announcement released by JP Morgan, Reeves said: “My budget doubles down on growth as our number one priority, creating the conditions for businesses to invest and thrive. I’m thrilled that JP Morgan Chase has chosen London for its landmark new building, which has given a multi-billion-pound vote of confidence in the UK economy and this government’s growth plans built on the rock of stability.”

However, a source close to JP Morgan said the bank had been working on this announcement for months and that the investment in the new headquarters was a long-term decision rather than related to any individual budget. They added that the bank had a quieter period to make the announcement because markets on Wall Street were closed for Thanksgiving.

Jamie Dimon, chief executive and chairman of JP Morgan, said: “London has been a center of commerce and finance 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 enduring commitment to the city, the UK, our customers and our people. The UK government’s priority for economic growth was a critical factor in making this decision.”

JP Morgan said overall the project is expected to bring around £10 billion to the UK economy, taking into account construction costs as well as the suppliers, business activity and employment the project will stimulate.

The direct cost of building the tower, whose height has not yet been confirmed, is thought to be close to £3 billion.

The new headquarters will take approximately six years to build and will be designed by British architects Foster + Partners, who also designed JP Morgan’s recently completed global headquarters at 270 Park Avenue in New York.

The news comes just months after the bank announced it would invest £350 million in its Bournemouth campus.

Goldman said the Birmingham expansion plans are part of broader investments in technology and artificial intelligence. A spokesman said: “We are increasing our funding activities into critical parts of the economy where we see significant opportunities to deploy capital, including in artificial intelligence and digital infrastructure, with several billion pounds ready to be committed.”