City growth will create 145,000 jobs in Central London by 2025
New research launched today (3 June) highlights the City’s role as the growth engine of the UK. It showed that by 2025, with the right conditions, 145,000 new jobs will be created in Central London, with over a quarter of these (39,000) located in the City. However, the continued possibility of “Brexit”, a lack of skilled employees, unaffordable housing, and a lack of aviation capacity could all pose a threat to achieving this level of growth.
The Future of the City of London’s Economy, produced by Centre for Cities and Cambridge Econometrics on behalf of the City of London Corporation, forecasts the City’s next decade of growth based on the most likely projections and found that as well as the rise in employment within the Square Mile, per job productivity will grow £27,000 to £141,000, taking it to three times the UK average. 90% of output gains and 70% of employment growth will be in Finance & Insurance; Media, IT & Communications; and Legal & Accounting.
The City generated £45 billion in economic output (GVA) in 2014, and as its specialised cluster of financial and business services remains in high demand, this is predicted to grow by £16 billion by 2025. Its forecast growth will, in addition, further increase the demand for high-skilled labour, continuing a trend that began in the early 1990s.
However, this demand-led growth will only be possible if economic, policy and regulatory conditions are favourable. Serious risk factors such as uncertainty over Britain’s membership of the EU; pressure on aviation capacity; lack of skilled workers to fill new posts; an inability of the transport infrastructure to handle a growing working population; excessive housing costs, and difficulty accessing finance could all hinder the ability of firms to meet demand, and work at their most productive level – leading to lower GVA and employment growth. In the City, firms have also highlighted broadband connectivity as a key factor in their ability to do business.
Conversely, the research points out that if market conditions are supportive, growth in the City could outstrip forecasts, with opportunities arising from the development of Financial Technology sector, good regulation and international markets all providing further opportunities for enhancing economic development.
Speaking as the report was launched, Mark Boleat, Chairman of Policy & Resources at the City of London Corporation, said: “Once again this report shows how vital the City’s success is to growth in London and the UK. There are serious challenges ahead for policy makers – we cannot let potentially limiting factors such as housing and transport for the City’s workers, lack of aviation capacity, inadequate broadband provision, or poor regulation create barriers to growth and artificially constrain the City’s proven ability to act as the engine of the UK’s economy.”
Ben Gardiner, of Cambridge Econometrics, the consultancy which led the study, said that “The report underlines the dynamism of London’s economy, particularly the City. It is common knowledge that London has generally out-performed the UK economy over the past decade, but our research demonstrates how this is expected to continue over the next 10 years, with increased concentration of high-productivity sectors and associated demand for skilled labour. The City will be at the heart of this growth, both in terms of output and jobs”. He added that “There are of course risks and uncertainties to any forecast, and our study is no exception. Availability of skilled labour and the necessary infrastructure to house and transport people is paramount. Adverse economic conditions in Europe and the possibility of Brexit also cast clouds on the (forecast) horizon.”
Andrew Carter, of Centre for Cities said “In recent years we’ve seen growth in high-skilled, high-paid jobs in the national economy being led by our city centres, most notably central London. Given this trend is likely to continue over the next decade, the focus of policy should be on making sure that central London businesses can get both the staff and office space they need to drive future growth, not just in the wider London economy but the national economy overall.”
Notes to editors
Bella Longman, Media Officer, City of London Corporation
Tel: 020 7332 1906 / Mobile: 07809 334 327
About the City of London Corporation
The City of London Corporation provides local government and policing services for the financial and commercial heart of Britain, the 'Square Mile'. In addition, the City Corporation has three roles: (1) we support London’s communities by working in partnership with neighbouring boroughs on economic regeneration, education and skills projects. In addition, the City of London Corporation’s charity City Bridge Trust makes grants of more than €15 million annually to charitable projects across London and we also support education with three independent schools, three City Academies, a primary school and the world-renowned Guildhall School of Music and Drama. (2) We also help look after key London heritage and green spaces including Tower Bridge, Museum of London, Barbican Arts Centre, City gardens, Hampstead Heath, Epping Forest, Burnham Beeches, and important ‘commons’ in south London. (3) And we also support and promote the ‘City’ as a world-leading financial and business hub, with outward and inward business delegations, high-profile civic events, research-driven policies all reflecting a long-term approach. See www.cityoflondon.gov.uk for more details.
About Centre for Cities
Cambridge Econometrics is a leading independent consultancy specialising in applied economic modelling and data analysis techniques. We aim to provide rigorous, accessible and relevant independent economic analysis to support strategic planners and policy-makers in business and government. Our work covers the UK, Europe and global areas across thematic areas such as labour markets, energy-environment, sub-national (including city-level) analysis. We also produce economic forecasts at macro, sectoral and sub-national levels.
About Cambridge Econometrics
The Centre for Cities is the first port of call for UK and international decision makers seeking to understand and improve UK cities’ economic performance. Our main goal is to understand how and why economic growth and change takes place in Britain’s cities, and to produce research that helps cities improve their performance. Through our focus on the drivers of urban success, we have developed a deep understanding of the economic performance of UK cities. We work with cities, business and Whitehall to ensure our work is relevant, accessible and of practical use to cities and the policy community.