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London Economy Streets Ahead of Other Regions

By +Eric Jafari

London economy is streets aheadLondon's economy has been outperforming other regions in the UK since 2007, according to new data from the Office for National Statistics. Analysing data from before the onset of the economic downturn onwards, it was observed that the capital's nominal output has increased at a much quicker pace than other regions, while its unemployment rates have also fared better.

What's more, larger growth in active business stock has helped to see an increase of over 250,000 jobs and rising incomes. This is in sharp contrast to the rest of the country, where jobs have declined and average income levels have contracted.

However, it isn't just London's economic performance that has stood apart from the rest over the UK over the last five years. According to the Office for National Statistics, the city has actually experienced the recession differently to other parts of Britain. The capital managed to maintain strong output growth in 2008 - a time when other regions began to note a slowdown in output. Similarly, in 2009 only a small decline was noted, whereas elsewhere outputs began to drop significantly. Interestingly, while the rest of the UK bounced back in 2010, London's growth slowed slightly, but then gained momentum again in 2011.

Overall, this means that from 2007 to 2011 London's economy grew by 12.4 per cent, compared to 2.3 per cent and 6.8 per cent across other UK regions. Consequently, the city was able to achieve a rising share of UK output of 21.9 per cent, compared to 20.7 per cent in 2007.

With such favourable economic factors, it is little surprise that property in London is also going from strength to strength. This is particularly clear in the residential sector, as an increasing population of highly mobile professionals drives up values. In its latest UK Annual Residential Index, IPD revealed that returns from private rental sector portfolios sat at 8.9 per cent in 2012, compared to 2.7 per cent gathered by the commercial property sector.

15 March 2013

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London Economy