Luxembourg courts the City: Roth meets Reeves in London to deepen post-Brexit financial ties

Luxembourg's finance minister Gilles Roth met Rachel Reeves, the UK chancellor of the exchequer, at 11 Downing Street this week, the centrepiece of a two-day financial mission to London that underlined how much of the Grand Duchy's €6.6 trillion fund industry still runs through the City — and how determined both governments are to keep that channel open a decade after the Brexit referendum.

The visit, from Wednesday 1 to Thursday 2 July, was organised by Luxembourg for Finance, the agency that promotes the financial centre abroad, in cooperation with the finance ministry. According to the ministry, Mr Roth and Ms Reeves highlighted the strong ties between the Luxembourg and UK financial centres and discussed opportunities to strengthen cooperation, in particular by promoting cross-border investment. The ministry pointed to challenges the European Union and the United Kingdom face in common: financing the digital and green transitions, raising defence spending and mobilising private capital to pay for it all.

"Luxembourg and the United Kingdom have long maintained close ties, based on genuine complementarity in the financial sector. Luxembourg is now the United Kingdom's leading market in Europe for the export of financial services," Mr Roth said, adding: "Ten years after the Brexit referendum, it is more important than ever to continue strengthening this strategic partnership."

Talks, not treaties

No new agreement, memorandum or regulatory arrangement was announced. The London meetings were discussions about deepening an existing relationship rather than a formal negotiation — but for Luxembourg's largest industry, the signalling matters. Mr Roth's language echoed remarks he made after meeting Ms Reeves at the margins of the Eurogroup and Ecofin councils in Brussels in December 2024, when he called the EU–UK dialogue vital and said Luxembourg "reste attaché à un partenariat étroit avec Londres" — remains committed to a close partnership with London.

Beyond Downing Street, the minister addressed the annual London conference of the Association of the Luxembourg Fund Industry (ALFI) on 2 July, held at Convene Sancroft near St Paul's Cathedral — a gathering the ministry said drew around 1,000 fund professionals, and for which ALFI reported more than 1,600 registrants. ALFI's chairperson, Jean-Marc Goy, has described the London event as "the largest international outreach initiative organised by Luxembourg's fund industry". Mr Roth also joined a working lunch with insurance and reinsurance executives and held a series of meetings with senior UK financial-sector representatives about expanding their activities in Luxembourg.

The plumbing that binds the two centres

The London–Luxembourg axis is one of the defining structures of post-Brexit European finance. UK-based asset managers typically domicile their EU-facing funds in Luxembourg — where they can be passported to investors across the bloc — while the day-to-day portfolio management is delegated back to investment teams in London. Luxembourg's supervisor, the CSSF, confirmed as early as 2019 that such delegation of investment management to UK firms could continue after Brexit, subject to cooperation conditions, even as the arrangement drew closer scrutiny at EU level.

The scale of the relationship is considerable:

Net assets in Luxembourg-domiciled funds stood at €6,634 billion at the end of May 2026, according to the CSSF — ALFI data show growth of 14.55% in the year to April — keeping Luxembourg the world's second-largest fund centre after the United States.

UK fund houses are the second-largest group of initiators of Luxembourg funds after US managers, accounting for roughly 17% of assets — around €847 billion — according to ALFI figures cited by Funds Europe in 2021.

Luxembourg was the largest EU destination for UK financial-services exports, taking £6.5 billion in 2023, or 6.1% of the UK total — roughly double the level of 2016 — according to TheCityUK's analysis of official trade data.

Those trade figures give substance to Mr Roth's claim that the Grand Duchy is the UK's leading European market for financial-services exports: much of what London "exports" to Luxembourg is precisely the portfolio management performed for funds legally domiciled between the Boulevard Royal and the Kirchberg plateau.

Why the Grand Duchy keeps knocking on London's door

For Luxembourg, the calculus is straightforward. The fund industry is the country's biggest economic engine, and UK managers are among its most important clients; anything that eases their access to Luxembourg structures — or reassures them that the delegation model will endure — protects jobs in the Grand Duchy's administration, custody, legal and audit ecosystem. For London, Luxembourg remains the most convenient gateway to EU retail and institutional investors at a time when the UK government is seeking growth and closer, calmer relations with the bloc.

The relationship has, if anything, tightened since 2016: assets managed for Luxembourg funds from the UK grew through the Brexit years, and UK financial-services exports to Luxembourg roughly doubled between 2016 and 2023, on TheCityUK's figures. The risks run in both directions, however. EU policymakers have periodically questioned how much substance should be required of fund managers who delegate outside the bloc, and any future tightening of delegation rules would strike directly at the model the two ministers spent this week celebrating.

That is why a meeting that produced no headline agreement still counts as news in Luxembourg. The Grand Duchy's prosperity rests to an unusual degree on a regulatory settlement negotiated in Brussels but lived out daily between London desks and Luxembourg domiciles — and on 1 and 2 July, its finance minister went to the source to keep it that way.