Research article

Channel Islands: Economic overview

As self-governing jurisdictions, Guernsey and Jersey have the power to shape their futures

Jersey and Guernsey are well-established financial centres. The sector remains the islands’ primary economic generator, accounting for 21% of employment and approximately 40% of their GVA. Total financial services employment has risen by 7% in Jersey in the last five years, and by 4% in Guernsey over the same period.

Figure 1

Key economic indicators 2018, unless specified
Source: Savills Research using States of Guernsey and States of Jersey | Note: ^Mar 18 *2017, ^^ real

The islands continue to diversify their financial service offer. In recent years growth has been driven by funds, fiduciary and insurance. In 2018, the value of funds under administration in Guernsey stood at £281.7bn, an increase of 28% since 2014, and at £319.9bn in Jersey, growth of 66% since 2013. Banking deposits have stabilised following a decline from a 2008 peak (see chart below).

Figure 2

Funds under administration have risen steadily in the last five years
Source: Savills Research

As self-governing jurisdictions, Guernsey and Jersey have the power to shape their futures, and are making efforts to further diversify the economic base. Fintech and e-gaming are emerging niches, combining financial expertise with new technology.

With a legacy of growing flowers, fruit and vegetables for export, the islands have extensive horticulture infrastructure in place which is beginning to be revitalised for new purposes, including the production and processing of Cannabidiol (CBD) products, now a licensed industry.

Figure 3

S&P Sovereign Credit Rating

Guernsey and Jersey in the world

Guernsey and Jersey are self-governing Crown Dependencies. They each have their own directly elected legislative assembly, administrative, fiscal and legal systems, and own courts of law.

Islanders have British nationality, and are part of the Common Travel Area of the British Isles. The Crown, through the UK Government, is responsible for the island’s defence and formal international relations.

The islands have never been part of the EU, but are part of the EU Customs Union. They are part of the OECD under the UK’s membership. Both Jersey and Guernsey access the EU Single Market via third country provisions and signing agreements outside of UK-EU relationship.

Both islands’ finance industries can expect their relationships with the EU to continue structurally unaffected, post-Brexit. The UK remains the Channel Island’s major trading partner however, so the UK’s future relationship with the EU, and the impacts on its economy, still has a knock-on effect on the islands.

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