The City of London, often called the Square Mile, is a small district at the historic core of London that covers about 1.12 square miles (2.9 square kilometres) and is a leading global financial centre. It is home to the Bank of England, the London Stock Exchange and Lloyd's of London, along with hundreds of banks, insurers and law firms. More than 600,000 people work there; about 8,600 live there.
The City is not London as a whole: Greater London comprises 32 boroughs plus the City, under the Mayor of London, while the City keeps its own ancient local authority, led by a Lord Mayor elected for one year. "The City" is also used loosely for the UK financial sector, as "Wall Street" is for US finance, and is distinct from Canary Wharf, a newer financial district further east.
The City of London in plain terms
Picture a large modern city with a tiny old town at its centre, roughly where its medieval walls once stood. Over the centuries the merchants in that old town stopped mainly selling cloth and spices and started selling money: loans, insurance, shares and foreign currency. Today far more people travel into it each morning than sleep there at night, and on Sunday mornings many of its streets are almost empty.
Because it is so old, the old town kept its own customs, its own mayor and even its own police force, separate from the government of the wider city around it. When people say "the City", they usually mean this small patch and the financial business done inside it, not London as a whole.
History
The district began as Londinium, a Roman settlement founded around AD 47 on the north bank of the Thames, and the line of its Roman and medieval walls still roughly marks the City's boundary. In the Middle Ages its merchants and craftsmen organised into guilds, the forerunners of today's livery companies, and won charters that protected the City's self-government. Most of it burned in the Great Fire of 1666 and was rebuilt on the old street plan.
The modern financial City took shape soon after. The Bank of England was founded in 1694 to lend to the government and moved to Threadneedle Street in 1734. Marine insurance grew out of Edward Lloyd's coffee house, opened in the 1680s, and share dealers who met in the coffee houses of Exchange Alley formed what became the London Stock Exchange, formally constituted in 1801. In the 19th century the bill of exchange drawn on London and the pound sterling financed much of world trade, under the gold standard.
Rise as a global financial centre
After the Second World War the City reinvented itself as an offshore market for other countries' money. From the late 1950s London banks took deposits and made loans in US dollars outside US rules, creating the eurodollar market and later the eurobond market. The "Big Bang" of 27 October 1986 abolished fixed commissions on the Stock Exchange, allowed outside firms to buy member firms and moved trading onto screens, bringing in large American and European banks.
London remains the largest centre for foreign exchange trading: the Bank for International Settlements' 2025 triennial survey gave the United Kingdom 38 percent of global turnover. The City was where the LIBOR benchmark was set until its phase-out, and it hosts the wholesale gold market whose bar standard is London Good Delivery. Large-value sterling payments between its banks settle through CHAPS.
Governance and regulation
The City has its own local authority, which runs services, plans buildings and promotes the financial sector at home and abroad. It is divided into 25 wards, each electing members to the Court of Common Council and the Court of Aldermen. Unusually for the United Kingdom, businesses based in the City can appoint voters for these elections, a system its supporters say reflects a population that is mostly workers and its critics call undemocratic. The City also has its own police force, the City of London Police, which leads national work against fraud.
Financial firms in the City are regulated nationally, not by the local authority. The Prudential Regulation Authority, part of the Bank of England, supervises banks and insurers for safety, while the Financial Conduct Authority oversees conduct and markets.
Brexit and its standing today
When the United Kingdom left the European Union, with the transition period ending on 31 December 2020, City firms lost EU passporting rights and moved some staff and activities to Dublin, Frankfurt, Paris and Amsterdam. London nonetheless remains a leading international financial centre: the Global Financial Centres Index published in March 2026 ranked it second, just behind New York. Its services draw in hedge funds and investment firms that rely on a local prime broker.
The City also has critics. Campaigners argue that its links with Crown Dependencies and British Overseas Territories, several of them seen as an offshore financial centre, have helped make London a hub for hidden wealth, and economists debate whether the size of the finance sector has skewed the wider UK economy towards London and the South East.