The report asserts that London is at the forefront of UK economic growth and remains highly competitive. Nevertheless, parts of London are continuing to under-perform and there are pressures in accommodating London’s growth. London is a major net contributor to the Exchequer. Skills and education are a key issue for the future including for London’s universities. There are also challenges in maximising the benefits of the Thames Gateway while London’s environmental record raises issues. London is set to be a major jobs creator over the next decade.

The report is one of a series of annual reports commissioned by the City of London to look at London’s place in the UK economy, how this has been evolving and how it is likely to develop in the future.

A wide range of sources, including statistical data and commentaries, was used to compile the report, which focuses on a limited number of specific subjects of importance.

London is well-placed to prosper over the next ten years. This reflects London’s unique competitive position in the key exporting private service sectors which are forecast to drive the UK’s economic growth. It also reflects London’s continuing role as a magnet for international migration which adds to the labour pool available to London’s employers and to the level of demand in the economy. The report forecasts that London will create an extra 600,000 jobs by 2016.

Key issues for London to tackle are the relatively high unemployment rate, the affordability and supply of housing, and its over-stretched transport infrastructure. There are also some skills shortages and gaps and issues for London’s universities to face such as how to attract more foreign students and how to compete most successfully in a global arena. One of the structural issues facing London’s economy is the challenge of accommodating its growth in terms of space for working and for living. Part of the solution may lie in the proposed developments in the Thames Gateway.

London performs poorly relative to the rest of the UK in terms of environmental indicators, such as water quality, air quality, waste, and pollution. This highlights the issue of whether cities in general are environmentally effective or not.

City of London
Malcolm Cooper, tel. +44 20 7332 3611

01/11/2006

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