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The head of JP Morgan Chase has given final approval on a massive three billion pound office complex in London after assurances from government representatives about supportive economic strategies.

Sequence of Developments

The Wall Street banking giant, which along with another major bank announced substantial investment plans right after being spared tax increases in the Treasury's recent budget announcement, only gave final approval the previous week.

This authorization was preceded by a trip to the United States by Varun Chandra, that met with the banking executive to provide assurances about the UK's economic approach.

Budget Context

The meeting took place shortly prior to the government disclosed revenue-raising measures in a economic plan that exempted the banking sector from higher levies, in response to intense lobbying from the financial sector.

"The development ... would potentially been canceled if this financial plan had been regarded as anti-prosperity."

Project Details

On Thursday morning, JP Morgan announced plans to construct a 3 million square foot building in Canary Wharf, which will serve as its main London office and house the majority of its London employees.

The financial institution stressed that the investment would depend on "supportive government policies in the UK".

Economic Impact

The bank has projected that the investment could generate £9.9 billion to the UK economy over the next six years.

The government official commented positively about the development, referring to it as a "significant demonstration of faith in the nation's financial future".

Additional Context

A source familiar with JP Morgan's building plans indicated that the decision to invest was "the result of comprehensive analysis" and that "no one could know whether financial institutions were going to be taxed before the announcement".

The JP Morgan chief stated that the "British authorities' focus of financial development has been a critical factor in helping us make this choice".

Parallel Announcements

A second financial institution revealed that it would enlarge its Birmingham office and hire 500 staff, in a strategy that would significantly increase its workforce in the Britain's second largest metropolitan area.

The government had examined expanding the financial sector tax in the UK, as it considered methods to increase income after deciding against increasing income tax rates, but eventually determined against the measure.

Financial institutions in the UK currently pay a higher corporate tax level, that is exceeding the typical percentage, as well as a separate levy on their domestic financial positions.