London’s housing supply crisis

By Robert Clear, Researcher in the City of London Research Team


The Greater London Authority estimates that the capital needs 48,841 new homes per year up to 2034/5 to keep up with the demands of a growing population. Around half that number are being built. Of the 48,841 homes required annually, the GLA estimates that 48% need to be market rate, 20% intermediate (homes for sale and rent provided at a cost above social rent, but below market levels) and 32% social or affordable rent.

Not only are too few houses being built, but the pattern of house completion does not reflect the pattern of need. Of the 23,640 house completions in 2013/14:


  • 5% (17,600) were market housing, compared to the 48% (23,217) that will be required each year, according to the GLA.
  • 9% (3,750) were social rent and 540 were affordable rent, compared to the 32% (15,722) required.
  • 2% (2,400) were intermediate, compared to the 20% (9,902) required.


Net conventional housing completions by tenure, London 2004/05 to 2013/14

Net conventional housing completions by tenure, London 2004.05-to-2013.14


The heavy bias towards market housing is accompanied by a longstanding reliance on the private sector to deliver the bulk of supply – a reliance that has increased over the past forty years. Throughout the 60s and 70s local authorities were responsible for the greater part of housing construction. This trend, however, changed from the 1980s, and since then the overwhelming majority of London’s housing construction has been carried out by the private sector, with a significant (though minority) share undertaken by housing associations.

Of the 24,363 dwellings were completed in London in 2015:

  • 6% (16,464) were built by the private sector.
  • 8% (7,759) were built by housing associations.
  • 5% (130) were built by local authorities.

The relationship between London’s population and its housing supply has changed significantly over time. Between 1961 and 1991 the capital’s population shrank by over 1.6 million, but during that period the number of homes increased by over half a million. Between 1991 and 1998, supply increased at less than 1 percentage point above population growth, and real house prices were stable, rising at an annual rate of about 1%.

Between 1998 and 2014, however, the rate of housing supply growth fell well below population increases. In this period London’s population grew by 21.1%, but dwelling stock grew by just 12.7%, with house prices increasing by 9% per year. There is also a longstanding trend for the conversion of houses to flats (as well as the conversion of other types of building to residential use), which has driven up London’s population density – the GLA predicts it will increase by 19.5% by 2041.


Percentage change in number of jobs, people and homes in London, 2009–14

Percentage change in number of jobs, people and homes in London, 2009-14


In recent years the disparity between the increase in jobs, people and houses has become acute. 698,000 jobs  were created in London between 2009 and 2014 - 14% increase, and the population grew by 596,000 (over 7%). But during that time only 120,000 homes were added - a less than 4% increase.

These figures illustrate the scale of the challenge facing policymakers. Business leaders must also engage with this challenge as London’s supply crisis threatens to overburden workers with ever increasing housing costs and erode the capital’s competitive advantages.






Talent and innovation keep London at the top: the Capital and competitiveness indices

By Maxine Kennedy, Researcher in the City of London Research Team


Over the past few weeks the Research Team have been looking into global competitiveness indices. They are useful to look at because they can give us a good understanding of the various factors that are used to measure city competitiveness.

Indices such as PwC’s Cities of Opportunity, A.T. Kearney’s Global Cities and JLL’s City Momentum Index are published regularly and track a range of cities around the world on different indicators. This means that we can see over time how different cities are performing across specific measurements.

Some indices are very comprehensive and look at a variety of aspects of competitiveness. For example PwC’s recently published Cities of Opportunity 7 looks at 30 cities and takes into account 67 variables, from ‘ease of starting a business’, to ‘mobile broadband speed’ and ‘proportion of public space’.

Others are more specific, for instance the Economist Intelligence Unit’s Global Liveability Ranking 2016 which looks at 140 cities across 30 indicators. This index only looks at components of living conditions, so for example takes into account ‘Quality of Public Healthcare’, and ‘Availability of Consumer Goods and Services’, but not others, such as the ‘Number of Registered Patents’ – which would be used to measure innovation.


Focusing on London

Our primary focus has been to assess how London fares in comparison to other major global cities, looking at where the capital needs to build its strength to maintain its competitive offer. 

The first thing that jumps out is that London sits (and has done for many years) at the top in most of the comprehensive indices.

JLL, The City Momentum Index 2016

JLL, The City Momentum Index 2016


Economist Intelligence Unit, Hotspots 2025, 2013

Economist Intelligence Unit Hotspots 2025, 2013


London’s strengths and areas for improvement

For this blog, I’ve chosen to look at just one of the indices we’re studying – PwC’s Cities of Opportunity 7 - because the report’s website includes a handy modeler in which you can choose areas of interest and compare cities along the same indicators.

Looking at all indicators just for London, the modular shows that on the whole, the capital scores highly in the ‘Intellectual Capital and Innovation’ category across indicators such as ‘Entrepreneurial Environment’ and ‘World University Rankings’. Similarly, London also performs highly in the ‘Economic Clout’ and the ‘Ease of Doing Business’ categories.


Ease of Doing Business category

Ease of Doing Business Category


London performs less well in ‘Transport and Infrastructure’ category, particularly around the ‘Affordability of Public Transport’ indicator, but scores highly in ‘Major Construction Activity’.

Transportation and infrastructure category

Transportation and Infrastructure category

The modular can also be used to compare London to other cities. For instance, London is renowned for its vast swathes of green space areas and this is reflected well in the ‘Public Park Space’ indicator, where the capital is doing well compared to its competitors.

Public Park Space indicator

Public Park Space indicator

Yet, in terms of ‘Air Pollution’, London is falling behind compared to other cities, particularly relative to Amsterdam and Berlin. But knowing this helps to support work to tackle this issue, and reinforces the policy priority of the Mayor of London and the City of London Corporation  to improve air quality in the City.

Public Park Space indicator (air pollution)


London’s way forward

While the implications of Brexit remain unclear, we do know that London today is doing exceptionally well across many indicators. Comparative indices are a useful way of highlighting where London is performing particularly well, as well as how the capital can improve its competitive offer. 






Brexit and the City

Blog by guest writer Ben Jones, Principal Economist (Surveys and Economic Analysis) at the CBI


Three months on from the referendum on the UK’s EU membership, economists are still getting to grips with the impact on the UK economy. The message from the initial data—including from the CBI’s business surveys of manufacturing, retail and services —is that although activity has probably slowed relative to the first half of the year, it has held up better in the immediate aftermath of the vote than many had expected.

To complete this initial snapshot of the post-referendum environment, we’ve now published the results of the latest quarterly CBI/PwC Financial Services Survey. The findings suggest that demand for financial services remained reasonably solid in the quarter to September, mirroring the picture in the wider economy.


Activity held up reasonably well…

The survey suggests that volumes of business rose in most subsectors—though not “finance houses” (specialist lenders, such as those offering car finance or business mortgages). Overall profitability in financial services also improved a little, although this comes on the back of a sharp slowdown in profits growth over the past year, with incomes under pressure from a combination of factors, such as low-interest rates/yields, disruptive technology and regulatory pressures, to name a few.

The survey merits a closer look for two additional reasons. First, given the role financial services play in supporting household consumption and helping businesses to grow, the survey can act as a bellwether for the wider economy. Second, as one of the UK’s most globally connected sectors—in terms of trade, capital and labour flows—Brexit creates a host of commercial, legal, regulatory and operational challenges to which firms must adapt in the years ahead. So what have we learnt?


… but sentiment has deteriorated

Despite improved business performance over the last quarter, optimism among financial services firms fell for a third consecutive quarter in the three months to September. This could be significant for what it says about the broader outlook—in the past we have found a reasonably strong correlation between changes in optimism in financial services and GDP growth six months later.

Looking ahead, financial services firms see growth in business volumes and profitability slowing in the three months to December. These trends are particularly marked in the three lending sectors—banks, building societies and finance houses—which have become much more cautious over their outlook.


FSoptimism - oct16


Firms are still deciding how to respond to Brexit vote…

Overall, the survey suggests that the impact of the EU referendum so far has been limited. In the first of three special questions assessing the short- and longer-term effects of the vote, we asked financial services to assess the initial impact on various aspects of their business.

Just over half of all FS firms pointed to a negative "general impact" on their business following the referendum result, with a further third saying the vote has had no impact. Only one in ten firms reported a positive impact. The main source of concern was market volatility, with over 70% pointing to a negative impact via that route. Others were concerned about the negative impact on balance sheets, revenues and funding costs.




Another question asked what actions firms had taken, or plan to take, in response to the EU referendum result. The results show that firms have also begun to assess the fall-out, though fewer than half have begun to review their strategies for dealing with the economic impact, capital management, geographical or legal implications. And in many sectors, a majority of firms have yet to decide whether to initiate a new project to deal the fall-out from the Brexit vote.




… and they see risks from Brexit outweighing opportunities

A third Brexit-question asked firms to rank the top three risks and opportunities facing their business over the medium term (for ease of presentation, we’ve converted these ranks to scores). The results show that the top risk by far is the “impact on the UK economy” (58% of the maximum score).

All in all, the survey is telling us that while the fall-out from the referendum has been limited so far, it’s still early days. It is not just economists who are getting to grips with the impact of the vote.

Risksandopps - oct16



Employment growth in the City

by Dr Laura Davison, Head of Research


This week saw the latest annual release of the Business Register and Employment Survey (BRES) figures, which give a detailed breakdown of the workforce for an area by sector - allowing us to look at where employment has grown or shrunk. This data is published with a year’s lag - so the figures published are for 2015 - but we use it as the basis for our official reporting, because it’s the most extensive survey of UK VAT and PAYE registered businesses, and informs the Government’s Inter-Departmental Business Register.

Looking at the new figures for 2015, a couple of statistics immediately jump out. The City of London has seen very strong jobs growth across 12 months, going from 414K (2014) to 455K (2015) – a 10% increase, with 41K new jobs created.

City employment has traditionally been concentrated in the four biggest sectors – finance and insurance; professional; business administration; and information and communication. This year’s data is no exception, with these four areas together accounting for 83% of City jobs – and 85% of the new jobs created.

As the following chart shows, with the exception of 2013, every year since 2010 has seen an increase in City jobs, with this latest period being the most substantial growth yet.


Laura - sept 30-16

The strongest growth was seen in ‘business administration and support services’, which saw over 18K new jobs and grew by 47%. While this is a wide ranging category - spanning travel agencies and security services, through to landscaping and window cleaning - for the City, almost all this growth was in temporary employment agencies (14.5K). Professional services had the second highest number of new jobs - 11K - largely accounted for by new jobs in business and management consultancy (6K) and head offices (3K). Both financial services (2.5K) and information and communication (2.5K) saw jobs growth - the latter particularly notable, as the tech sector has flourished in the City in recent years, rising from 24K in 2010 to 37K in 2015 - a 55% increase.

More broadly, London also saw jobs growth across this period - 180K new jobs created, with growth of 3.7% bringing London’s total jobs to 5.04 million. The City of London is the largest component of these new jobs (41K), followed by Westminster (22.5K), Hounslow (22K), and Tower Hamlets (17K). Six London boroughs saw negative growth, with Hillingdon reporting by far the largest drop (-21K).

As with the City, business support services (56K) and professional and technical (52.5K) have primarily driven this growth, alongside sectors such as property (22K), health (17K), and those linked to leisure – such as retail (17.5K) and accommodation. Sectors seeing notable falls in jobs were construction (-6K), wholesale (-4K), and public administration (-4K).       

The data also reinforces London’s position as a driver of jobs and growth in the UK economy, which saw overall growth of 576K jobs (2%) across England, Scotland and Wales. London accounted for 31% of these new jobs, followed by the South East (21%) – and 17% of the workforce.

These figures demonstrate that the City of London underpins London’s jobs growth – illustrating its role as a key contributor to the capital’s economy, and its continuing importance to the UK.

London’s international workforce

By Robert Clear, Researcher


London’s workforce is one of the most international in the world, reflecting the fact that the city receives the lion’s share of immigrants who settle in the UK. According to the most recent census data, over a third (37%) of the capital’s workplace population was born abroad. Moreover, of those born outside the UK, nearly 60% hold British passports, meaning they have citizen rights of work and residency that are independent of international agreements. This group, foreign-born British passport holders, comprise almost a quarter (22%) of the workers in London.

The international make-up of London’s workforce has been conditioned by years of large-scale migration. Between 1975 and 2012, an average of 160,000 people moved to London annually from elsewhere in the United Kingdom.  The number of Londoners leaving the capital and moving to other parts of UK, however, exceeded this considerably – averaging 220,000 yearly. On top of this a further 100,000 Londoners moved abroad each year. Many of those moving to and from London are students and young workers. What has stopped London from being a net exporter of people is the annual average intake of 170,000 international immigrants. Their contribution to the population means that, despite the large number of existing London residents moving away, immigration from abroad (and higher birth rates to non-UK born mothers - 58% of all live births in London) tips the scales in favour of an annual population gain for the capital.

Though these figures illustrate the ebb and flow of people in the context of domestic and international migration, they do not take into account where people were born. When we look to the Census to explore the data that takes into account country of birth, we can see that in the decade between 2001 and 2011 (when the latest census was carried out) the capital’s UK-born resident population decreased by 1%, whilst the non-UK resident population increased by 54%.

Drilling further down into the workforce figures is revealing: in 2012 58% of all people employed in London were born in the UK, whilst 12% were born in EEA (European Economic Area) and 29% came from elsewhere in the world. Those born in the EEA had the highest levels of employment, at 74.4%, compared to 71.1% for UK-born and 63.1% for non-EEA-born.  Over a third of London’s residents in 2012 (38% – or 1.4 million) were employed in low-skill occupations. Of these, 47% were non–UK born, but only 14% of those in low-skilled occupations were EEA-born.

Looking at these workforce statistics, the makeup of London’s workforce poses a number of significant challenges for London policy-makers as they plan for the future, managing Brexit and wider priorities, to ensure that London remains a preeminent global centre for business.




[Figures taken from  GLA Economics – Trends in the demand for labour and skills across London as a whole (May 2016); GLA Economics – Migrant employment in low-skill work (March 2014); The Migration Observatory – Briefing, London: Census Profile (May 2013); GLA Economic – Draft Economic Evidence Base 2016; National insurance number registration in Greater London 2002-2015 (DWP); London Datastore – National Insurance Number Registrations of Overseas Nationals, Borough and MSOA; City of London Corporation – The Future of the City of London’s Economy (July 2015); Centre for London – Continental Capital – London’s Links with Europe (June 2016)]


The rapid rise of responsible business

by Asha Owen-Adams, City Business Trainee in the Economic Development Office


Corporate Responsibility, CSR, Responsible business… Whatever you want to call it, these are terms that are becoming harder and harder to avoid, and so they should. There is increasing emphasis on businesses to be successful in their CSR programmes, as well as being financially successful. It seems that well-known responsible business trend setters like The Body Shop and Ben & Jerry’s are not alone in their quest for business to have “a responsibility to the community and environment”. The pressure is not only coming from the business appetite for competition but from increasingly conscious customers, who seek reassurance that the organisations they interact with are also interacting responsibly.

The term Corporate Responsibility can cover such an array of ideas including responsible procurement and SME engagement, responsible development, volunteering, diversity in the workforce and sustainability. It's not so clear- cut as it can first seem; the topic also raises questions: For instance, Can a business be considered responsible if it gives to charity, but the CEO gets a 10% pay rise whilst their workers get 2%? With the gap between executive pay for top corporates being 144 times the average Brit's, the topic is definitely up for debate. In actual fact, it can often come down to personal definition of what a responsible business is. Despite this, the current work put in place by many corporates shouldn't go unrecognised for example, BLP's employee gender split of 59.4% female and 40.6% male; Liberty Speciality Markets volunteering 27,000 hours in 2015; DWF reaching and maintaining it's 80% target for recycling, as these are all valid examples of Corporate Responsibility.

The main idea is for businesses to have a more positive impact on the community, moving away from the perception that business’ one duty is profit making. And with the apparent correlation between the loyalty a customer feels towards a business and how socially responsible it is, it seems a worthwhile investment, and it is evident that many organisations are realising its worth.  

Furthermore, recent research by Business in the Community (BITC) provides evidence for the progression in corporate responsibility, as it shows that more businesses are taking responsibility by monitoring their social and global impact. 86% BITC’s Corporate Responsibility participants assess the risk of global pressures - 'megatrends' (such as population growth, social divisions and climate change) – up from 67% in 2014. The 19% increase in only 2 years demonstrates the speed at which businesses are changing their practice to become more socially responsible.



Great evidence of the growing prominence of responsible business is the phenomenon that is B Corp, a movement giving certification to member businesses (currently 1812) that meet certain social and environmental criteria, as well as standards of transparency. B Corp organisations are worth a total of $28bn, indicating that responsible business is no longer a small and isolated movement, due to its obvious financial success, rather it feels like a natural progression within business. Goldman Sachs was quoted in The B Corp Handbook reporting “more capital is now focussed on sustainable business models”, reaffirming the significance of responsible business practice.

Luckily, as well as the increasing pressure, there is also a greater level of access and information about how to get involved in CSR. The City of London’s input has programmes in place such as City Action, a volunteering brokerage, and Heart of the City (HotC), a charity and small business network which gives companies in London the tools, such as easily accessible knowledge on CSR, to improve society and demonstrate responsibility. With City Action, a programme managed by the CR Team, soon to be the Responsible Business Team, supporting businesses that do not have dedicated employee volunteering experience or resources, and HotC’s introduction of their mapping tool, which makes it easier for HotC’s members quickly detect local needs and charities they can partner with, it is really becoming harder and harder for business to claim being responsible is too challenging.

Whilst there are undeniably more steps to be taken to make corporate social responsibility the norm, not only in the City of London, but everywhere, it is important to acknowledge how much business culture has changed for the better in the past decade alone. With events in the city celebrating good CSR, Lord Mayor’s Dragon Awards and BITC’s Responsible business awards to name but a few, there is definitely enough motivation out there for maintaining good business practice.

Regarding the future of responsible business, like any other popular trend, the expectation is that it will continue to grow and develop, absorbing different businesses and encompassing broader sectors. And In short, this is down to the fact that progressively, the success of a business’ social and environmental programmes is a test on the business’ success overall.






How important is UK financial services trade with the EU?

by Saif Ullah, Researcher


With London regarded as the world’s leading financial centre, the uncertainty caused by the UK’s recent decision to leave the EU could have major implications on whether the capital can maintain its competitive position in financial services. Some major multinationals, such as Prudential, have already begun to discuss plans to move operations and staff to other centres in Europe in order to maintain access to the Single Market.

The Research team here in the City of London has been looking at the UK’s trade with EU markets to help understand how Brexit has the potential to affect financial services..


Goods vs services - EU

 In terms of volume, the UK exports more goods than it does services. Within the EU Germany is by far the UK’s largest trade partner for goods, exporting £60.8bn to the UK in 2014. Other major goods exporters to the UK are the Netherlands (£31.7bn) and France (£25bn).

Approximately 44% of the UK’s total exports both in goods and services went to the EU in 2014 (£229bn out of £515bn), with goods exports to the EU accounting for £148bn (65%) of this amount. However, the UK operates a significant trade deficit with the EU in terms of goods (£79bn), meaning that the UK imports more goods from the EU than it sells.

Source: ONS, Pink Book 2015

In contrast, the UK operates a surplus in its services trade with the EU, meaning that the UK sells more than it buys. Total services exports to the EU were worth £81.3bn in 2014 while imports were worth £64.2bn, leaving a trade surplus of just over £17bn. Germany (£12.1bn), France (£11.7bn) and the Netherlands (£11bn) are the primary markets for UK services exports.


Source: ONS, Pink Book 2015


Importance of financial services

Financial services (FS) and insurance make up the largest proportion of the UK’s services trade, accounting for £22.7bn (26%) of services exports to the EU. Once again, it is the larger economies in the EU that are the dominant markets for UK financial services exports, with France (£4.7bn), Netherlands (£3.5bn) and Germany (£3.3bn) being the biggest recipients.


Wider markets

The UK also has a number of important trading partners globally. The US imports £21.6bn worth of FS and insurance services from the UK, nearly the same as the total amount of financial services exports to the EU. Other major recipients of UK FS and insurance exports include Japan (£3bn) and Australia (£1.2bn).

Taiwan imported £176m of FS and insurance services from the UK in 2014, £18m more than the previous year, while there was also growth in trade with Japan (up nearly £200m to £3bn) and Indian markets (up £1m to £218m). Although there was a general decline in FS and insurance exports from the UK in 2014, economies such as South Africa (£436m), Singapore (£515m), Hong Kong (£593m) and Saudi Arabia (£342m) have remained major trading partners.

UK’s main FS and insurance export markets outside EU


Trade in FS and Insurance, 2014 (£m)













Hong Kong




South Africa


Saudi Arabia















Source: ONS, Pink Book 2015


Life after Brexit

While EU member states in unison remain the primary market for the UK’s FS and insurance exports, receiving nearly a third (33%) of the total amount exported, the UK has developed strong and growing trade relationships with many countries outside of the EU. The strength of the financial and insurance services cluster in London, the availability of highly skilled staff and the wealth of professional, legal and tech services all underpin the capital’s reputation as a world leading financial centre. If we can maintain these strengths, there is good reason to believe that the UK’s financial services industry can continue to prosper outside of the EU.

The City of London Corporation, and in particular the Economic Development Office will be significantly increasing our investment to support financial services across the UK, reinforcing our strategy and delivery in building future products and services in financial services; promoting exports and investment; strengthening and influencing the wider regulatory framework; and enhancing our partnerships with business and government.



Clusters in the City and the growth of the technology, media and telecommunications sector

 by Maxine Kennedy

Research Officer at the City of London


Last week (10 August 2016) , the City of London's Research team published a set of maps showing firm movements in and out of the City between 2012 and 2014.

Commissioned by the City of London Corporation and undertaken by Trends Business Research using their own unique database, the maps show patterns of firm activity for five sectors: insurance; professional services; finance; technology, media & telecommunications (TMT), and administration & support services.


MAX1Certain spatial patterns are immediately obvious: The City's insurance firms are tightly clustered in the east – a pattern that dates back hundreds of years. The City's professional services firms are more dispersed, but with a notable cluster in the west. The City's finance firms are clustered in the centre-east. The City’s administration and support service firms have no obvious cluster- which is not surprising, as these firms tend to locate near to their client base rather than near each other. The City’s TMT firms have no obvious cluster, but this could be because the sector is still developing. However there is some evidence of clustering in the west and centre-east of the City.


Why cluster?

Clustering continues to be a marked phenomenon  despite modern technology reducing some of the traditional needs for firms to be physically close to one another. Evidence shows that businesses continue to find benefits from, for example, a shared pool of skilled staff and suppliers. In 2013, just over 60% of City firms bought from others based in the City, and almost 70% made sales to other City firms. Research produced by the City of London earlier this year noted that the prestige of already existing firms was a key draw for firms move to the City. Others have found that productivity increases in business clusters. Whilst there is a lot of evidence about how firms cluster on a city scale - for instance, California’s Silicon Valley, the tech clusters around Cambridge University and New York’s financial hub - comparatively less is known about how firms cluster within cities. These maps help to shed light on these patterns.


The rise of the TMT sector


TMT is a relatively new sector in the City, and has a comparatively higher churn rate (i.e. more firms starting and closing). Thus the map for this sector shows a lot of activity with some clustering in the west and central-east areas of the City boundary.

Although the City remains predominately a financial and professional services hub (financial services alone accounted 39% of City employment in 2014), the growth of the TMT sector is undeniable. Its workforce has grown 44% since 2010, and the latest figures show that 34,500 people, or 8% of the City’s workforce, is in TMT.

Recent data from JLL states that at 31%, it was the TMT sector that presented the most active demand for City offices in Q2 of this year (2016). Between 2001 and 2010, financial services firms accounted for 29% of office take-up; TMT firms at 10%. However, by the next decade, TMT firms had taken over: 21% of take-up was in the TMT sector and 19% was in the finance sector.  This echoes a larger trend in Central London, where the TMT sector has been the biggest take up of office space over the past five years.



Source: JLL, Central London Office Market Report, Q2 2016                                                                                                                                                                                 


       Source: Knight Frank, Central London Quarterly Q2 2016


The future of the TMT cluster

With the TMT sector growing rapidly in the City  - and in London more widely - how might this play out spatially? Taking into account the benefits of clustering , and the  already established tech hub around Old Street on the northern border of the City, will we see this developing sector begin to form a tight cluster within the City boundaries, as the long-established City sectors have? This is something myself and colleagues in the Research team will be keeping a close eye on.

We’ll be updating the maps with the latest data available towards the end of the year, so please check this page, or sign up to our mailing list here to see how these trends evolve.




The implications of Brexit for London – a focus on migration

By Dr Laura Davison

Head of Research at the Economic Development Office, City of London Corporation


London’s pre-eminence as a global centre for financial and professional services is underpinned by many long-standing strengths across the physical, political, economic and social infrastructure. Key among these is its global reach – in terms of both access to markets and the ability to attract a skilled workforce from around the world.

Distinctive aspects of London’s economy mean that London will be sensitive to particular implications of Brexit in different ways to other parts of the UK - in particular London’s economic concentration in services and the international nature of its workforce and businesses.

For companies exporting to the EU, and London residents with EU nationalities, the impact will be directly tied to the shape of the Brexit negotiations, for example through restrictions to the free movement of EU nationals and direct access to the rest of the EU’s market of 444 million people. There will also, though, be wider consequences for London’s international residents if visa requirements change as a result, and for those international businesses who locate here because of the EU market access this allows -  for example through financial services passporting.

Census data from 2011 highlights just how international London’s population is – with over a third (37%) of residents born outside the UK, and 10% born in other EU 28 nations – 31% of the UK’s total EU population. In contrast, across the rest of the UK (excluding London), 9% were born overseas and 4% elsewhere in the EU. Recent analysis by the Centre for London[1] highlights the key part that EU workers play in some sectors of London’s economy – in particular in the construction industry and accommodation and food services, where they make up substantial proportions of the workforce.

% of jobs held by EEA nationals

Yet the FT[2], working with the Oxford Migration Observatory, has highlighted that many such workers would not meet existing visa requirements - potentially as many as 94% employed in hotels and restaurants, and three quarters of EU construction workers.

Other service sectors - such as financial and professional services - also have a much higher proportion of EU workers in London relative to other parts of the UK. In financial services, these are concentrated in particular subsectors and companies; City recruitment firm eFinance[3] carried out an analysis of the nationality and employment of its database of 156,000 workers, where 17% of London’s financial services jobs were filled by EU workers. Investment banking had the highest proportions, while there were also distinct concentrations of nationalities – such as the Polish workforce in accounting.


Large firms are important employers in London - and particularly so for financial services, with the 90 FS firms with 500+ employees accounting for two thirds of London’s financial services employment.[4] Investment banks are some of the biggest, employing thousands in London, and many thousands more across the country. As the EU is such an important market for FS exports - 41%[5] - the shape of the UK’s future relationship with the EU will have a key impact here.

Finally, London also has a highly international student population. London Higher[6] and HESA figures show that London’s 33k EU students make up 9% of the student population, relative to about 5% for the rest of the UK. Some universities have particularly high concentrations - 18% of LSE’s students and 16% of Imperial’s are from the EU. The UK is also one of the largest recipients of EU research funding, receiving an estimated €8.8bn across 2007 – 2013.[7] Non EU countries such as Norway and Switzerland can contribute to and participate in funding programmes (such as Horizon 2020) and student exchanges (such as the Erasmus programme). Participation is contingent on certain criteria, however - as Switzerland is now discovering, with the suspension of its Erasmus and Horizon participation following its migration referendum in 2014.[8] 

While London’s migration patterns are complex, with different nationalities having moved here at different points in time and for different reasons, it is obvious that EU and international workforce, students, residents and visitors play a significant role in London’s economy. The outcome of Brexit negotiations could change the face of the city profoundly.










Curators, coders, musicians and meat traders

By Robert Clear, Researcher in the City of London Research team

The City’s north west flank, where Smithfield blends into Farringdon and Clerkenwell, is an unusual district of the square mile. It’s not a centre of finance or law, contains few international headquarters, no skyscrapers and none of the great monuments that draw crowds of international tourists. It is, however, one of London’s most historically and architecturally rich areas, and the City of London Corporation aims to turn the 800 metres between the Barbican and Smithfield Market into a globally important cultural quarter.

The first big steps in this venture will be in the realms of music and conservation, and will address one of the capital’s great cultural challenges: though its orchestras are world class, the spaces they play in are not. Its most important concert halls, the Barbican (home to the London Symphony Orchestra) and the Southbank Centre, are widely considered inferior to their counterparts in other global cities such as New York, Paris and Tokyo.

A decision, however, by one of the capital’s leading cultural institutions has created an opportunity to redress this imbalance: the Museum of London is moving home, and a world class concert hall is to be built in its place – a 1,900 seat venue that will be one of the finest anywhere.  

From its current site, a 1970s construction straddling a roundabout at the end of London Wall, the Museum will relocate a few streets away to Smithfield. There it will share the Victorian home of London’s last medieval wholesale market – still the centre of London’s meat trade after almost a thousand years. The move will increase the Museum’s size from 17,000 to over 27,000 square metres and, it’s hoped, be a catalyst of further cultural developments (more information on the project can be found here).

To an extent, the flow of institutions across spaces is the product of chance – the Museum’s move happens to free a central London plot suitable for a concert hall, and its takeover of the western end of Smithfield Market is possible because the latter currently lies empty. On the other hand, each of these players and spaces is connected with the City of London Corporation. In 2021, when the Museum vacates its current spot on London’s Roman boundary, the Corporation plans to gift the land for the construction of the new concert hall. It’s also one of the Museum of London’s principal funders and is the owner of Smithfield Market.

These connections reflect the Corporation’s unique position as a cultural custodian. Less obviously, perhaps, its promotion of a cultural quarter is tied to its role as a supporter of business. For the City’s north western edge is emerging as a start-up cluster, notably in the tech sector. The Corporation’s challenge in the coming years, then, will be to take advantage of the area’s historical spaces to foster arts and business together. If successful, a district shared by curators, coders, musicians and meat traders will be a legacy for the future.