A study of the largest 74 conurbations placed the historic city in 13th place, based on its well-paid workforce, high employment, business survival rates and low costs. Leeds ranked 28th, according to the research, which highlighted its talent pool and competitive business rates.
Nationally, Cambridge emerged as the top place in the UK for its business competitiveness ahead of long-term academic rival, Oxford, with Edinburgh ranked third.
The research, by Birmingham University for Santander, measured factors relating to enterprise, talent, connectivity, costs and well-being.
Professor Francis Greene said: “This report utilises an extensive range of official data to build a unique picture of the UK, examining the business ‘building blocks’ that help make a town more or less business competitive.”
He said business conditions vary from place to place and these can affect the development of private sector companies.