London accounts for approximately 22 per cent of theUK's economic output.[16][17] 841,000 private sector businesses were based in London at the start of 2013, more than in any other region or country in the UK. 18 per cent are in the professional, scientific and technical activities sector while 15 per cent are in the construction sector. Many of these are small and medium-sized enterprises.[18]
London shifted to a mostly service-based economy earlier than other European cities, particularly following theSecond World War. A number of factors contribute to London's success as aservice industry and business centre:
English being the native language and the dominant international language of business;
its position in Europe, since Europe has a population larger than that of the US, and a central time zone that allows London to act as a bridge between US and Asian markets;[22]
a business friendly environment (for example, relatively low taxes for corporations and non-domiciled foreign individuals;[26][27] and, in theCity of London, the local government is not elected by the resident population but instead by resident businesses – the City of London is a business democracy);[28][29]
good transport infrastructure particularly its aviation industry;[30][31]
Currently, over 85% (3.2 million) of the employed population of Greater London works in the service industries. Another half a million employees resident in Greater London work in manufacturing and construction, almost equally divided between the two.[35]
London has five major business districts:the City,Westminster,Canary Wharf,Camden &Islington andLambeth &Southwark. One way to get an idea of their relative importance is to look at relative amounts of office space: Greater London had 26,721,000 m2 of office space in 2001.
Business district
Office space (m2)
Business concentration
The City
7,740,000
Finance, broking, insurance, legal, fund managers, banking
Westminster
5,780,000
Head offices, real estate, private banking, hedge funds, government
Camden & Islington
2,294,000
Creative industries, finance, design, art, fashion, architecture, media
A useful guide to the distribution of wealth across London is the cost of renting office space.Mayfair andSt. James's are historically and currently the most expensive areas – approximately £146 per sq ft per annum. The least expensive commercial districts areWaterloo &Southwark andEast London Tech City, a new, but growing hub of start up technology companies, also known asSilicon Roundabout – approximately £65 per sq ft per annum.[36]
TheLondon Stock Exchange is the most international stock exchange and the largest in Europe.[37][38] More than half of the London Stock Exchange top 100 listed companies (theFTSE 100) and over 100 of Europe's 500 largest companies are headquartered in central London. Over 70% of the FTSE 100 are located within London's metropolitan area, and 75% ofFortune 500 companies have offices in London. According to research by Deloitte, "London has the most internationally diverse executive community in the world, attracting business leaders from 95 nationalities and with alumni working in 134 countries".[39]
Financial services in London benefited from the UK's membership of theEuropean Union (EU),[63] although there were concerns following the decision of the United Kingdom to leave the EU. However, Britain’s exit from the EU in early 2021 (Brexit) only marginally weakened London's position as an international financial center (IFC).[64]
The combination of lax regulation and London's financial institutions providing sophisticated methods tolaunder proceeds from criminal activity around the world, including those from the drug trade, makes the City a global hub for illicit finance and London a safe haven for the world's malfeasants, according to research papers and reports published in the mid-2010s.[65][66][67][68][69][70]
BT Centre, the headquarters ofBT Group, in the City of London
Media companies are concentrated in London, and the media distribution industry is London's second most competitive sector.[76] TheBBC is a key employer, and other broadcasters also have headquarters around the city. Manynational newspapers are edited in London: historically inFleet Street in the City, but now dispersed across the capital.Soho is the centre of London'spost-production industry.Hollywood's links with the United Kingdom are centred on London, and contribute billions to the economy.[77][78]
Tourism is one of London's prime industries. London is the most visited city in the world by international tourists with 18.8 million international visitors forecast in 2015[out of date], ahead of Bangkok (18.2 million) and Paris (16.1 million).[79] Within the UK, London is home to the ten most-visited tourist attractions.[80] Tourism employed the equivalent of 350,000 full-time workers in London in 2003[out of date],[81] whilst annual expenditure by tourists is around £15bn.[82]
A growing number of technology companies are based in London, notably inEast London Tech City, also known as Silicon Roundabout. Investment in London's technology sector was $2.28 billion in 2015[out of date], 69 per cent higher than the $1.3 billion raised in 2014. Since 2010, London-based technology companies have collectively raised $5.2 billion of venture capital funding.[out of date][83] A report byErnst & Young highlighted the importance of London to the UK'sFinTech industry in terms of availability of expertise and demand for services.[84] London has also been named as the fastest growing technology hub in Europe, having over 100 unique tech companies with a value of $1 billion or more.[85][86]
London is a major retail centre,[87][88] and in 2010[out of date] had the highest non-food retail sales of any city in the world, with a total spend of around £64.2 billion.[89] The UK's fashion industry,centred on London, contributes tens of billions to the economy.[90]
For the 19th and much of the 20th centuries London was a major manufacturing centre, with over 1.5 million industrial workers in 1960. Manufacturing suffered dramatic decline from the 1960s on.[91] Entire industries have been lost including shipbuilding (which ended in 1912 after hundreds of years with the closure of theThames Ironworks and Shipbuilding Company), consumer electronics, aircraft manufacture and most of the vehicle construction industry. This trend continues, with the loss of the pharmaceutical manufacturing sites of Aesica (formerlyMerck Sharp and Dohme) at Ponders End in 2011,[92][93] andSanofi-Aventis (originallyMay & Baker) at Dagenham by 2013.[94]Pharmaceutical and biotechnology companies in the United Kingdom have a strong presence in London, including the world headquarters ofGlaxoSmithKline.[95][96]
In 2016, over 100,000 people were employed in London's manufacturing sector.[97] Most worked, and continue to work, in medium or small-sized businesses such asCharlie Bigham's ready-meal factory in Park Royal, Fox Umbrellas in Croydon or Kashket & Partners (military uniform tailors in the Lea Valley). However, almost certainly the largest manufacturer still operating in London isFord UK, whose diesel engine manufacturing plant and vehicle operations hub in Dagenham employs around 2,000.[98] Another household name isBrompton Bicycle Ltd who employs several hundred inGreenford, Ealing. There is also still some large-scale food and drink manufacturing. Examples includeCoca-Cola factories in Edmonton and Sidcup,Warburtons bakery in Enfield,United Biscuits' factory inHarlesden,Fuller's Brewery inChiswick,Nestlé's factory inHayes (coffee and chocolate) andTate & Lyle's refinery inSilvertown (sugar and syrup).
London was named the city with the best real estate investment opportunities for foreign investors in 2014.[99] Office development was at a four-year high in 2013 with 9.7 million sq ft across 71 schemes under construction.[100]
A multibillion-pound 10-year construction programme has begun inNine Elms on theSouth Bank of the river Thames in central London. This will develop the area from a semi-derelict, light industrial zone into a modern residential and business district. The programme includes regeneration ofBattersea Power Station, construction of new embassies for theUnited States and the Netherlands, and regeneration ofNew Covent Garden Market which is the largest fresh produce market in the UK. Transport improvement plans includetwo new Northern line tube stations, River Bus piers, new bus services and a network of cycle lanes and footpaths. A new bridge across the river Thames will link Nine Elms to Pimlico on the opposite bank. Around 25,000 permanent jobs will be created once the new buildings are occupied and around 16,000 new homes.[101][102][103]
Other large construction projects includeKings Cross Central andPaddington Waterside. In 2014, the government identified 20 new housing zones across London,[104] and in February 2015 the development of the first nine zones was approved, which will create 28,000 new homes by 2025 from £260m of investment.[105]
Most of the leadinglearned societies of the world are based in London. TheRoyal Institution is a historic and important repository and proponent of the acquisition of scientific knowledge through research and study. London is Europe's leading centre for arts education.[111]
Crossrail is a railway line running east to west through London and into the surrounding countryside, which opened in 2022. It runs on 118 km (73 mi) of track with a branch toHeathrow Airport.[114] The main feature of the project is construction of 42 km (26 mi) of new tunnels connecting stations in central London including a branch to Canary Wharf in east London. It was Europe's biggest construction project with a £15 billion projected cost.[115][116] An additional line,Crossrail 2, has been proposed.
Most of the streets of central London were laid out before cars were invented, and London's road network is often congested. There is a £16/day congestion charge in Central London.[117] TheUltra Low Emission Zone (ULEZ) adds an extra charge of £12.50/day for vehicles which do not meet Euro 4 standards for petrol and Euro 6 for diesel (which corresponds to vehicles made before 2007 and 2015 respectively). The ULEZ charge will be extended to the North and South Circular from October 2021.[out of date][118]
There are a number of proposals for expanding airport capacity for London includingexpansion of London Heathrow Airport andexpansion of Gatwick Airport. The principal argument in favour of airport expansion is to support economic growth in the UK by providing an international hub for air-transport links to fast-growing developing countries around the world.[119] The Heathrow proposal expects to create 120,000 new jobs across the UK and bring economic benefits of more than £100 billion.[120] It also anticipates boosting exports as a result of the expansion.[121]
Once the largest port in the world, thePort of London is today the second-largest in the United Kingdom, handling 48 milliontonnes of cargo each year.[122] The port is not located in one area – it stretches along thetidal Thames, includingcentral London, with many individualwharfs,docks, terminals and facilities built incrementally over the centuries. As with many similar historic European ports the bulk of activities has steadily moved downstream towards the open sea, as ships have grown larger and other city uses take up land closer to the city's centre. Today, much of the Port of London cargo passes through thePort of Tilbury, outside the boundary ofGreater London.
London Gateway, the UK's newest container port, opened in 2013. The £1.5bn facility at Thurrock, Essex, is 20 miles (32 km) down the River Thames from London. It is expected[out of date] to be able to handle 3.5 million containers a year. The development is forecast to create 27,000 jobs in London and the South East and contribute £2.4bn a year to its economy.[123]
^"Press Conference by Kerry, British Foreign Secretary Hague". United Kingdom Foreign and Commonwealth Office, London: U.S. Department of State. 9 September 2013. Archived fromthe original on 3 March 2016. Retrieved8 December 2013.John Kerry: We are not only each other's largest investors in each of our countries, one to the other, but the fact is that every day almost one million people go to work in America for British companies that are in the United States, just as more than one million people go to work here in Great Britain for American companies that are here. So we are enormously tied together, obviously. And we are committed to making both the US–UK and the US–EU relationships even stronger drivers of our prosperity.
^"London's Place in the UK Economy, 2005-6"(PDF). Archived fromthe original(PDF) on 25 May 2006. Retrieved6 November 2006. (960 KiB), p19,Oxford Economic Forecasting on behalf of the Corporation of London. Published November 2005. Retrieved 19 June 2006.
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