Statistics | |
---|---|
Population | 8,796,628 (2021) [1] |
GDP | £526.5 billion (2021) [1] |
GDP per capita | £59,855 (2021) [1] |
Labour force | 4,829,000 / 76.1% in employment (Oct–Dec 2023) [lower-alpha 1] [2] |
Labour force by occupation | List
|
Unemployment | 191,000 / 3.8% (Oct–Dec 2023) [lower-alpha 3] [2] |
Average gross salary | £796.30 per week (2023) [lower-alpha 4] [2] |
External | |
Exports | £190.0 billion (2021) [lower-alpha 5] [3] |
Export goods | £37.8 billion (2021) [lower-alpha 6] [3] |
Imports | £138.5 billion (2021) [lower-alpha 5] [3] |
Import goods | £62.6 billion (2021) [lower-alpha 6] [3] |
The economy of London is dominated by service industries, particularly financial services and associated professional services, which have strong links with the economy in other parts of the United Kingdom (UK) and internationally. [4] In addition to being the capital city of the United Kingdom, London is one of the world's leading financial centres for international business and commerce and is one of the "command centres" for the global economy. [5] [6] [7]
London is the most populous region, urban zone and metropolitan area in the United Kingdom. [8] London had the fifth largest metropolitan economy in the world in 2011 according to the Brookings Institution. [9] Some of its neighbourhoods have estimated per capita GVA as high as £116,800 ($162,200). [10] The London fiscal surplus, £32.5 billion in 2016–17, [11] mostly goes towards funding services in other parts of the UK. [12]
London generates approximately 22 per cent of the UK's GDP. [13] [14] 841,000 private sector businesses were based in London at the start of 2013, more than in any other region or country in the UK. 18 per cent are in the professional, scientific and technical activities sector while 15 per cent are in the construction sector. Many of these are small and medium-sized enterprises. [15]
Greater London produced £503 billion [16] while the economy of the London metropolitan area — the largest in Europe with Paris [ clarification needed ] generates around 1/3 of the UK's GDP or around $1.0 trillion(in PPP). [17]
London shifted to a mostly service-based economy earlier than other European cities, particularly following the Second World War. A number of factors contribute to London's success as a service industry and business centre:
Currently, over 85% (3.2 million) of the employed population of Greater London works in the service industries. Another half a million employees resident in Greater London work in manufacturing and construction, almost equally divided between the two. [34]
London has five major business districts: the City, Westminster, Canary Wharf, Camden & Islington and Lambeth & Southwark. One way to get an idea of their relative importance is to look at relative amounts of office space: Greater London had 26,721,000 m2 of office space in 2001.
Business district | Office space (m2) | Business concentration |
---|---|---|
The City | 7,740,000 | Finance, broking, insurance, legal, fund managers, banking |
Westminster | 5,780,000 | Head offices, real estate, private banking, hedge funds, government |
Camden & Islington | 2,294,000 | Creative industries, finance, design, art, fashion, architecture, media |
Canary Wharf | 2,120,000 | Banking, media, legal |
Lambeth & Southwark | 1,780,000 | Accountancy, consultancy, local government |
A useful guide to the distribution of wealth across London is the cost of renting office space. Mayfair and St. James's are historically and currently the most expensive areas – approximately £146 per sq ft per annum. The least expensive commercial districts are Waterloo & Southwark and East London Tech City, a new, but growing hub of start up technology companies, also known as Silicon Roundabout – approximately £65 per sq ft per annum. [35]
The London Stock Exchange is the most international stock exchange and the largest in Europe. [36] [37] More than half of the London Stock Exchange top 100 listed companies (the FTSE 100) and over 100 of Europe's 500 largest companies are headquartered in central London. Over 70% of the FTSE 100 are located within London's metropolitan area, and 75% of Fortune 500 companies have offices in London. According to research by Deloitte, "London has the most internationally diverse executive community in the world, attracting business leaders from 95 nationalities and with alumni working in 134 countries". [38]
London's largest industry remains finance. It is the largest financial exporter in the world, and makes a significant contribution to the UK's balance of payments. [39] [40] In the 2017 Global Financial Centres Index, London was ranked as having the most competitive financial center in the world. [41] However, in the 2018 ranking, London had lost that title to New York City. In the same ranking for 2020, London came second after New York City (with cities such as Shanghai, Tokyo, Hong Kong, Singapore, Beijing, San Francisco, Shenzhen and Zurich in the top 10). [42] The City of London is home to exchanges, banks, brokers, investment managers, pension funds, hedge funds, [43] private equity firms, insurance companies and reinsurance markets. London is notable as a centre of international finance where foreign participants in financial markets come to deal with one another. [6] [44] It is also home to the Bank of England, the second oldest central bank in the world, and the European Banking Authority, although the latter was moving to Paris in March 2019 following the Brexit referendum of 2016. [45] [46] Other key institutions are Lloyd's of London for insurance and the Baltic Exchange for shipping. [47] [48]
A second financial district has developed at Canary Wharf to the east of the City, which includes the global headquarters of two of the world's largest banks, HSBC and Barclays, the rest-of-the-world headquarters of Citigroup and the headquarters of the global news service Reuters. London handled 36.7% of global currency transactions in 2009 [update] – an average daily turnover of US$1.85 trillion – with more US dollars traded in London than in New York, and more Euros traded than in every other city in Europe combined. [49] [50] [51] [52] [53] London is the leading centre for international bank lending, [54] derivatives markets, [55] money markets, [56] international insurance, [57] trading in gold, silver and base metals through the London bullion market and London Metal Exchange, [58] and issuance of international debt securities. [59] [60] [61]
Financial services in London benefited from the UK's membership of the European Union (EU), [62] although there were concerns following the decision of the United Kingdom to leave the EU. However, Britain’s exit from the EU in early 2021 (Brexit) only marginally weakened London's position as an international financial center (IFC). [63]
The combination of lax regulation and London's financial institutions providing sophisticated methods to launder proceeds from criminal activity around the world, including those from the drug trade, makes the City a global hub for illicit finance and London a safe haven for the world's malfeasants, according to research papers and reports published in the mid-2010s. [64] [65] [66] [67] [68] [69]
London is a leading global centre for professional services. [70] [71] Many different types of professional service providers are located in the city including the big four accountants and major management consulting firms. London is the headquarters for four of the world's six largest law firms and is a leading international centre for legal services. [72] [73] [74]
Media companies are concentrated in London, and the media distribution industry is London's second most competitive sector. [75] The BBC is a key employer, and other broadcasters also have headquarters around the city. Many national newspapers are edited in London: historically in Fleet Street in the City, but now dispersed across the capital. Soho is the centre of London's post-production industry. Hollywood's links with the United Kingdom are centred on London, and contribute billions to the economy. [76] [77]
Tourism is one of London's prime industries. London is the most visited city in the world by international tourists with 18.8 million international visitors forecast in 2015[ out of date ], ahead of Bangkok (18.2 million) and Paris (16.1 million). [78] Within the UK, London is home to the ten most-visited tourist attractions. [79] Tourism employed the equivalent of 350,000 full-time workers in London in 2003[ out of date ], [80] whilst annual expenditure by tourists is around £15bn. [81]
A growing number of technology companies are based in London, notably in East London Tech City, also known as Silicon Roundabout. Investment in London's technology sector was $2.28 billion in 2015[ out of date ], 69 per cent higher than the $1.3 billion raised in 2014. Since 2010, London-based technology companies have collectively raised $5.2 billion of venture capital funding.[ out of date ] [82] A report by Ernst & Young highlighted the importance of London to the UK's FinTech industry in terms of availability of expertise and demand for services. [83] London has also been named as the fastest growing technology hub in Europe, having over 100 unique tech companies with a value of $1 billion or more. [84] [85]
London is a major retail centre, [86] [87] and in 2010[ out of date ] had the highest non-food retail sales of any city in the world, with a total spend of around £64.2 billion. [88] The UK's fashion industry, centred on London, contributes tens of billions to the economy. [89]
For the 19th and much of the 20th centuries London was a major manufacturing centre (see Manufacturing in London), with over 1.5 million industrial workers in 1960. Manufacturing suffered dramatic decline from the 1960s on. [90] Entire industries have been lost including shipbuilding (which ended in 1912 after hundreds of years with the closure of the Thames Ironworks and Shipbuilding Company), consumer electronics, aircraft manufacture and most of the vehicle construction industry. This trend continues, with the loss of the pharmaceutical manufacturing sites of Aesica (formerly Merck Sharp and Dohme) at Ponders End in 2011, [91] [92] and Sanofi-Aventis (originally May & Baker) at Dagenham by 2013. [93] Pharmaceutical and biotechnology companies in the United Kingdom have a strong presence in London, including the world headquarters of GlaxoSmithKline. [94] [95]
A substantial industrial plant remaining in operation is Ford Dagenham, the largest diesel engine manufacturing site in the world. [96] [ Citation is out of date ] Food and drink manufacture remain in places, for example baking at Warburtons in Brimsdown, biscuits at United Biscuits in Harlesden, brewing at Fuller's Brewery in Chiswick, manufacture of coffee and chocolate by Nestlé in Hayes in West London, and refining of sugar and syrup by Tate & Lyle in Silvertown. At 2.8%, London was the region containing the lowest proportion of employees engaged in UK manufacturing.[ when? ]
London was named the city with the best real estate investment opportunities for foreign investors in 2014. [97] Office development was at a four-year high in 2013 with 9.7 million sq ft across 71 schemes under construction. [98]
A multibillion-pound 10-year construction programme has begun in Nine Elms on the South Bank of the river Thames in central London. This will develop the area from a semi-derelict, light industrial zone into a modern residential and business district. The programme includes regeneration of Battersea Power Station, construction of new embassies for the United States and the Netherlands, and regeneration of New Covent Garden Market which is the largest fresh produce market in the UK. Transport improvement plans include two new Northern line tube stations, riverbus piers, new bus services and a network of cycle lanes and footpaths. A new bridge across the river Thames will link Nine Elms to Pimlico on the opposite bank. Around 25,000 permanent jobs will be created once the new buildings are occupied and around 16,000 new homes. [99] [100] [101]
Other large construction projects include Kings Cross Central and Paddington Waterside. In 2014, the government identified 20 new housing zones across London, [102] and in February 2015 the development of the first nine zones was approved, which will create 28,000 new homes by 2025 from £260m of investment. [103]
London is a leading global educational centre, with one of the largest populations of overseas students of any city in the world. [104] [105] [106] The federal University of London has over 120,000 students, making it the largest contact teaching university in the United Kingdom and one of the largest universities in Europe. It comprises 19 colleges and 12 institutes. [107] The largest and most well-known University of London colleges include University College London, King's College London, Birkbeck, Queen Mary, the London School of Economics and Political Science, Royal Holloway, Goldsmiths, City, and the Institute of Education.
Imperial College London, King's College London, LSE and UCL are leading centres of research and stand alongside MIT, Berkeley, Princeton, Yale and other US universities in terms of international reputation. [108]
Most of the leading learned societies of the world are based in London. The Royal Institution is a historic and important repository and proponent of the acquisition of scientific knowledge through research and study. London is Europe's leading centre for arts education. [109]
Transportation contributes to both the service and construction sectors of the London economy.
London has an integrated public transport system operated by Transport for London under a single electronic ticketing system, the Oyster card. The city's network successfully provided transport for the 2012 Summer Olympics. [110] It includes the London Underground, London Overground, Docklands Light Railway, London Buses and London River Services. A ring of 18 main-line railway stations provides train links to cities, towns and villages around the country as well as international services to Paris, Brussels and Amsterdam via the high-speed Eurostar. [111]
Crossrail is a railway line running east to west through London and into the surrounding countryside, which opened in 2022. It runs on 118 km (73 mi) of track with a branch to Heathrow Airport. [112] The main feature of the project is construction of 42 km (26 mi) of new tunnels connecting stations in central London including a branch to Canary Wharf in east London. It was Europe's biggest construction project with a £15 billion projected cost. [113] [114] An additional line, Crossrail 2, has been proposed.
Most of the streets of central London were laid out before cars were invented, and London's road network is often congested. There is a £16/day congestion charge in Central London. [115] The Ultra Low Emission Zone (ULEZ) adds an extra charge of £12.50/day for vehicles which do not meet Euro 4 standards for petrol and Euro 6 for diesel (which corresponds to vehicles made before 2007 and 2015 respectively). The ULEZ charge will be extended to the North and South Circular from October 2021.[ out of date ] [116]
London is served by six international airports which are the world's busiest city airport system by passenger traffic. These are Heathrow, Gatwick, Stansted, Luton, London City, and Southend.
There are a number of proposals for expanding airport capacity for London including expansion of London Heathrow Airport and expansion of Gatwick Airport. The principal argument in favour of airport expansion is to support economic growth in the UK by providing an international hub for air-transport links to fast-growing developing countries around the world. [117] The Heathrow proposal expects to create 120,000 new jobs across the UK and bring economic benefits of more than £100 billion. [118] It also anticipates boosting exports as a result of the expansion. [119]
Once the largest port in the world, the Port of London is today the second-largest in the United Kingdom, handling 48 million tonnes of cargo each year. [120] The port is not located in one area – it stretches along the tidal Thames, including central London, with many individual wharfs, docks, terminals and facilities built incrementally over the centuries. As with many similar historic European ports the bulk of activities has steadily moved downstream towards the open sea, as ships have grown larger and other city uses take up land closer to the city's centre. Today, much of the Port of London cargo passes through the Port of Tilbury, outside the boundary of Greater London.
London Gateway, the UK's newest container port, opened in 2013. The £1.5bn facility at Thurrock, Essex, is 20 mi (32 km) down the River Thames from London. It is expected[ out of date ] to be able to handle 3.5 million containers a year. The development is forecast to create 27,000 jobs in London and the South East and contribute £2.4bn a year to its economy. [121]
The economy of Germany is a highly developed social market economy. It has the largest national economy in Europe, the third-largest by nominal GDP in the world, and fifth by GDP (PPP). Due to a volatile currency exchange rate, Germany's GDP as measured in dollars fluctuates sharply. In 2017, the country accounted for 28% of the euro area economy according to the International Monetary Fund (IMF). Germany is a founding member of the European Union and the Eurozone.
The economy of Hong Kong is a highly developed free-market economy. It is characterised by low taxation, almost free port trade and a well-established international financial market. Its currency, called the Hong Kong dollar, is legally issued by three major international commercial banks, and is pegged to the US dollar. Interest rates are determined by the individual banks in Hong Kong to ensure that they are market driven. There is no officially recognised central banking system, although the Hong Kong Monetary Authority functions as a financial regulatory authority.
The economy of Russia has gradually transformed from a planned economy into a mixed market-oriented economy. It has enormous natural resources, particularly oil and natural gas. In 2023, it was the world's 11th-largest economy by nominal GDP, 6th-largest by purchasing power parity (PPP) according to IMF, and 5th-largest according to World Bank. Due to a volatile currency exchange rate, Russia's GDP as measured in dollars fluctuates sharply. Russia was the last major economy to join the WTO, becoming a member in 2012.
The economy of the United Kingdom is a highly developed social market economy. It is the sixth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power parity (PPP), and twenty-first by nominal GDP per capita, constituting 3.1% of nominal world GDP. The United Kingdom constitutes 2.3% of world GDP by purchasing power parity (PPP).
The economy of Ukraine is an emerging, lower-middle income, mixed economy located in Eastern Europe. It grew rapidly from 2000 until 2008 when the Great Recession began worldwide and reached Ukraine. The economy recovered in 2010 and continued improving until 2013. From 2014 to 2015, the Ukrainian economy suffered a severe downturn, with GDP in 2015 being slightly above half of its value in 2013. In 2016, the economy again started to grow. By 2018, the Ukrainian economy was growing rapidly, and reached almost 80% of its size in 2008.
The United Arab Emirates is a high-income developing market economy. The UAE's economy is the 3rd largest in the Middle East, with a gross domestic product (GDP) of US$415 billion in 2021-2023.
The economy of France is a highly developed social market economy with notable state participation in strategic sectors. It is the world's seventh-largest economy by nominal GDP and the ninth-largest economy by PPP, constituting around 4% of world GDP. Due to a volatile currency exchange rate, France's GDP as measured in dollars fluctuates sharply. France has a diversified economy, that is dominated by the service sector, whilst the industrial sector accounted for 19.5% of its GDP and the primary sector accounted for the remaining 1.7%. In 2020, France was the largest Foreign Direct Investment recipient in Europe, and Europe's second largest spender in research and development. It was ranked among the 10 most innovative countries in the world by the 2020 Bloomberg Innovation Index, as well as the 15th most competitive nation globally according to the 2019 Global Competitiveness Report. It was the fifth-largest trading nation in the world. France is also the most visited destination in the world, as well as the European Union's leading agricultural power.
HSBC Holdings plc, originally The Hongkong and Shanghai Banking Corporation, and known locally as HongkongBank in Hong Kong, Canada and Australia during the early 1980s to late 1990s, is a British universal bank and financial services group headquartered in London, England, with business links to East Asia and a multinational footprint. It is the largest Europe-based bank by total assets, ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 trillion in assets under custody (AUC) and $4.9 trillion in assets under administration (AUA).
Financial services are economic services tied to finance provided by financial institutions. Financial services encompass a broad range of service sector activities, especially as concerns financial management and consumer finance.
The economy of England is the largest economy of the four countries of the United Kingdom. England's economy is one of the largest and most dynamic in the world, with an average GDP per capita of £34,690 in 2021.
The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable public sector in strategic sectors. It is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 139th by GDP (nominal) and 127th by GDP (PPP). From independence in 1947 until 1991, successive governments followed Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat driven enterprises and economic regulation. This is characterised as dirigism, in the form of the Licence Raj. The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning. Since the start of the 21st century, annual average GDP growth has been 6% to 7%. The economy of the Indian subcontinent was the largest in the world for most of recorded history up until the onset of colonialism in early 19th century.
The economy of the European Union is the joint economy of the member states of the European Union (EU). It is the second largest economy in the world in nominal terms, after the United States and the third one in purchasing power parity (PPP) terms, after China and the United States. The European Union's GDP estimated to be around $19.35 trillion (nominal) in 2024 and $26.64 trillion(PPP) representing around one sixth of the global economy. Germany has the biggest national GDP of all EU countries, followed by France and Italy.
The economy of Birmingham is an important manufacturing and engineering centre, employing over 100,000 people in the industry and contributing billions of pounds to the national economy. During 2013, the West Midlands region as a whole created UK exports in goods worth £19.6 billion, around 8.73% of the national total.
The economy of Scotland is an open mixed economy and the second largest economy of the four countries of the United Kingdom. It had an estimated nominal gross domestic product (GDP) of £211.7 billion in 2023, including oil and gas extraction in the country's continental shelf region. Since the Acts of Union 1707, Scotland's economy has been closely aligned with the economy of the rest of the United Kingdom (UK), and England has historically been its main trading partner. Scotland conducts the majority of its trade within the UK: in 2017, Scotland's exports totalled £81.4 billion, of which £48.9 billion (60%) was within the UK, £14.9 billion with the European Union (EU), and £17.6 billion with other parts of the world. Scotland’s imports meanwhile totalled £94.4 billion including intra-UK trade leaving Scotland with a trade deficit of £10.4 billion in 2017.
The economy of Leeds is the most diverse economy of all the UK's main employment centres and has seen the fastest rate of private-sector jobs growth of any UK city and has the highest ratio of public to private sector jobs of all the UK's Core Cities. Leeds has the third-largest jobs total by local authority area with 480,000 in employment and self-employment at the beginning of 2015.
Edinburgh, the capital city of Scotland, is a powerhouse of the Scottish economy, as well as the wider UK economy. Edinburgh has been consistently one of the most prosperous parts of the country and has the strongest economy of any city in the UK outside London. Financial Times FDi Magazine has named Edinburgh as the "Best Large European City of the Future" and "Best Foreign Direct Investment Strategy " for 2012/13.
A financial centre or financial hub is a location with a significant concentration of participants in banking, asset management, insurance, and financial markets, with venues and supporting services for these activities to take place. Participants can include financial intermediaries, institutional investors, and issuers. Trading activity can take place on venues such as exchanges and involve clearing houses, although many transactions take place over-the-counter (OTC), directly between participants. Financial centres usually host companies that offer a wide range of financial services, for example relating to mergers and acquisitions, public offerings, or corporate actions; or which participate in other areas of finance, such as private equity, hedge funds, and reinsurance. Ancillary financial services include rating agencies, as well as provision of related professional services, particularly legal advice and accounting services.
The economy of Manchester is among the largest in England. Manchester is a city and metropolitan borough of Greater Manchester. It lies within the United Kingdom's second-most populous urban area, with a population of 2.55 million. Manchester's commercial centre is in Manchester city centre, focused on Spinningfields, Mosley Street, Deansgate, King Street and Piccadilly Gardens.
Barclays plc is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services.
The financial service industry in the United Kingdom contributed £174 billion in 2021, or 8.3% of total UK gross value that year. It represents a boon on the UK, European and global economies.
By being a Member State of the European Union the United Kingdom is part of the world's largest single market – an economic zone larger than that of the United States and Japan combined with a total GDP of around £11 trillion. This single market of 500 million people provides a relatively level playing for British business to trade in. This enables not just free trade in terms of the absence of customs duties or tariffs but a common set of rules so that business does not have to comply with 27 different sets of regulations.
John Kerry: We are not only each other's largest investors in each of our countries, one to the other, but the fact is that every day almost one million people go to work in America for British companies that are in the United States, just as more than one million people go to work here in Great Britain for American companies that are here. So we are enormously tied together, obviously. And we are committed to making both the US–UK and the US–EU relationships even stronger drivers of our prosperity.
A survey yesterday showed that London is where most people in the world want to work, beating Paris and New York...Quality of life is decisive.; "London 'is most desirable global city to move to for work'". The Telegraph. 6 October 2014. Retrieved 25 May 2015; "Decoding Global Talent". BCG. 6 October 2014. Retrieved 25 May 2015.
Global bankers may love London's domicile laws, property market and voluntary tax regime but the subconscious factor remains lifestyle.; "HSBC decides to remain headquartered in the UK". HSBC. 14 February 2016. Retrieved 2 March 2016.
Big push for London