London is Europe’s leading economic powerhouse, says new report

01 March 2016

London is Europe’s most economically powerful city but must position itself to succeed in a changing and growing global economy, according to a major new report published by the Mayor of London, Boris Johnson MP.

"London: The Global Powerhouse” provides a data rich analysis of London's competitive position. It outlines how London ranks against other global cities and highlights the challenges and the many opportunities that it faces.

The report investigates the city’s position in the global economy on a range of indicators and measures including competitiveness, foreign direct investment flows, tourism, a destination for global company headquarters and major sporting events. It concludes that London outstrips Paris as Europe’s leading global city due to its business friendly approach and puts the city on an equal footing with New York on many measures.

While 20 years ago, London’s economy was dominated by financial services, the report showcases the range of vibrant economic clusters that are now driving activity across the city. Although sectors such as law, consultancy and banking ensure London has the highest number of skilled mobile jobs of any city in the world, including New York, the capital is now also home to emerging clusters that offer huge potential in life sciences and financial technology.

The report has been written for the Mayor by his Chief Economist Dr Gerard Lyons and has been published online today.

The Mayor of London, Boris Johnson MP said: “London is a truly colossal commercial and economic dynamo, driving job creation across the country and acting as a magnet for investment and opportunity. This invaluable report proves that London is leading the way as Europe’s leading city and highlights some of the factors that will determine its future success.”

The city faces a number of challenges that will determine its future success, including the impact of globalisation, according to the report. It argues that the world economy is changing dramatically with the emergence of new economic forces such as China and India who pose both an opportunity and a threat to London’s dominance. The report states that London needs to play to its economic strengths and ensure it positions itself to succeed and prosper in this changing and growing global economy.

The report also argues that the future economic and financial success of London is not reliant on whether the UK is in the European Union or not. It echoes the sentiments of “The Europe Report: A win-win situation” which was published by the Mayor in 2014 and argued that London has nothing to fear from leaving the EU and would continue to thrive.

At a regional level, the report highlights work carried out by the independent London Financial Commission which put forward the case to devolve more spending to London, allowing it to keep the stamp duty raised in the capital. Today’s report supports that call but argues that rather than concentrating on new tax raising powers for cities, the focus should be on spending money more efficiently.

The Mayor of London’s chief economic advisor, Dr Gerard Lyons, said: “By delving deep into the vast reams of data and surveys on global cities this report proves that London stands on an equal footing and beats almost all of its counterparts worldwide. One of the greatest challenges and opportunities for London is how it continues to handle the impact of globalisation – if it can play to its strengths and embrace change it will continue to provide an environment in which people and businesses can prosper and grow.”

"London: The Global Powerhouse” can be viewed at www.london.gov.uk/globalpowerhouse