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The top executive of JP Morgan Chase signed off on a significant three billion pound new tower in London after assurances from UK government officials about business-friendly measures.

Sequence of Developments

The major US bank, which together with Goldman Sachs revealed major UK investments hours after avoiding higher taxes in the Treasury's financial statement, formally signed off the previous week.

This decision came after a trip to New York by the prime minister's envoy, who held discussions with the JP Morgan chief to offer guarantees about the business environment.

Budget Context

The meeting happened days before the government revealed revenue-raising measures in a economic plan that spared the banking sector from higher levies, after intense lobbying from the banking industry.

"The development ... would likely not have proceeded if this financial plan had been regarded as against business interests."

Project Details

On this week, the banking giant disclosed plans to build a 3 million square foot headquarters in Canary Wharf, which will serve as its main London office and accommodate a significant portion of its London employees.

The financial institution stressed that the investment would rely on "a continuing positive business environment in the UK".

Financial Benefits

The financial institution has indicated that the project could generate nearly ten billion pounds to the British economy over the next six years.

The Treasury chief commented positively about the development, describing it as a "significant demonstration of faith in the UK economy".

Additional Context

A source familiar with the bank's investment strategy indicated that the investment choice was "based on multiple factors" and that "it was impossible to predict whether financial institutions were going to be taxed before the financial statement".

Jamie Dimon commented that the "Treasury's emphasis of business expansion has been a critical factor in influencing our this choice".

Parallel Announcements

Another major bank revealed that it would expand its Midlands operation and recruit new employees, in a strategy that would substantially expand its workforce in the Britain's second largest metropolitan area.

The Treasury had considered expanding the banking charge in the UK, as it explored ways to raise revenues after opting not to implement higher personal taxation, but eventually determined to maintain current levels.

Financial institutions in the UK currently pay a higher corporate tax level, that is above the typical percentage, as well as a additional charge on their British operations.