London will thrive as a financial centre over the next decade by becoming the natural western hub for emerging market growth, according to one of the City’s best-known hedge funds.

In stark contrast to bankers’ doom-laden predictions about the City’s imminent demise and defections of hedge funds amid movement of some staff to Switzerland by prominent funds such as BlueCrest Capital and Brevan Howard, Toscafund is convinced that the growth of the Bric nations – Brazil, Russia, India and China – can only work to London’s advantage.

“The idea that London is going to be full of tumbleweed in 10 years is not credible,” said Savvas Savouri, chief economist at Tosca. “There are too many aspirational economies that don’t have infrastructures of their own.

“We have an affinity with India, with the Gulf, even with China, via Hong Kong. These markets will want a western hub.”

He predicts that London will attract at least 100,000 new financial services jobs over the next decade.

The upbeat analysis of the City’s prospects came in stark contrast to a crisis of confidence, exacerbated last month by the imposition of a 50 per cent supertax to be levied on bankers’ bonus pools.

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