The City of London has extended its lead as the UK’s strongest economic area since the 2008 crash, according to new research out today.
The City has grown “dramatically” since 2008, the study from UHY Hacker found, at double the speed of the national average over this period.
Between 2008 and 2015, the latest period for which figures are available, the City’s gross value added (GVA) increased by 24 per cent, from £236,356 to £292,855 per head. The national GVA average increased by 12 per cent, from £22,873 to £25,601.
GVA measures an area’s contribution to the UK economy based on the value of goods and services it produces. The City has the highest GVA, and the top five areas are all in central London.
“Despite the predictions of some would-be Cassandras, the City has actually increased its importance to the UK economy in the wake of the banking crisis,” said UHY Hacker partner Colin Jones. “When the crisis was at its height, many predicted a decline in the importance of the City’s economy, but instead it has proven to be resilient and still easily outpaces other major UK cities.
“Indeed, its growth is still primarily driven by its huge wholesale financial services industry.”
He noted that in addition to investment banks and professional services firms, the City is also now home to more fintech and non-traditional financial services industries.
“The City, along with the rest of central London, continues to generate huge amounts of wealth for the national economy,” Jones added. “Not only has the City stayed dominant, but the wider economy of London as a whole continues to go from strength to strength.
“On the eve of the start of Brexit negotiations the City, ironically, looks healthier than ever. However, it remains to be seen whether Brexit will prove to be the City’s next existential crisis as firms debate whether to relocate offices to other European cities such as Frankfurt and Paris.”