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London offers a ray of hope in our gloomy economy

City comment: London will be a major contributor to the levelling-up the Government is so keen to achieve

Jonathan PrynnBusiness Editor
25 May 2023

T IS almost exactly a year to the day since the first Elizabeth line services carried fare-paying passengers across London. It has been a long time coming but its impact on the capital’s economy is already huge.

The east-west route has quickly established itself as the busiest railway in Britain and has been a hugely valuable addition to London’s strained transport infrastructure.

Despite the gloom around prospects for the UK economy as a whole there are reasons to be optimistic about London.

Little-noticed official data slipped out last week showed the capital was the fastest-growing region in the country in the July to September quarter. Its GDP was up by 0.9% during the quarter and 6.7% year on year, rates that the Chancellor could only dream of for the national accounts.

Tourism is recovering — though not helped by the abolition of VAT refunds on shopping — and anyone visiting Sloane Square this week could attest to the huge numbers drawn into the area for the Chelsea Flower Show. It was also encouraging today to hear Young’s — one of the capital’s oldest beer companies — say that its London pubs are experiencing stronger sales growth than those elsewhere in England.

For so long London’s economic prospects appeared threatened by the damaging after-effects of Brexit and Covid.

There is still much to put right, not least the daunting housing cost cliff-edge that has to be scaled by younger workers. But the extra tax revenues generated by a strong and growing London will be a major contributor to the levelling-up the Government is so keen to achieve.

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