The capital’s economy contracted by 2.6 per cent in 2009, after growing by 3.9 per cent the year before. The drop was the largest for all UK regions.
And London lost 192,000 jobs during the year, the highest number in the country. Most jobs were lost in business, finance and insurance, according to the Office for National Statistics (ONS).
However, the city still leads the country in terms of wealth creation. London’s gross value added (GVA) per head, which measures individual contribution to the economy, was £34,200 – still 71.2 per cent above the UK average, despite the recession.
And 28.7 per cent of the country’s employees work in London and the south east, the report showed.
For the first time since the data series began in 1989, every region saw a fall in GVA, and employment was down in all regions except the south west.
The total number of employees in Great Britain for 2009 was 26.2m, down by 783,000 – 2.9 per cent – on the previous year.
The south east – excluding London – suffered a 3.5 per cent fall in its overall GVA, which is used as an estimate of economic activity.
Yet economists expect a turnaround in the data as the recovery gains strength.
In 2009 the economy contracted by five per cent, yet the Office for Budget Responsibility (OBR) has forecasted 1.8 per cent growth for this year, and 2.1 per cent next year.
And employment is projected to grow by 1.1m by 2015, according to the OBR’s forecasts.