The Economic Outlook for London

摘要

1. Incorporating the most recent data revisions, London's output is now estimated to have grown by 2.6% in 2011, up from 1.9% reported in the April article on the London Outlook. This means that London's recovery from the financial crisis has been more than three times stronger than that of the UK as a whole. Looking at sectors, the rebound has largely been driven by professional & technical activities, construction and information & communications.rn2. Despite this positive revision, the escalation of the Eurozone debt crisis and domestic squeeze from persistently high inflation means that our forecast for 2012 is now more pessimistic, with London's GVA forecast to grow by just 0.4%. Although weaker, compared to the forecast UK contraction of 0.2% London actually stands out favourably. The slowdown will be evident across most industries, with construction even contacting slightly as the Olympics end, but being prevented from deeper falls by the Crossrail and other ongoing projects. GVA growth is expected to pick up in 2013 and then settle at an average rate of 3.3% over 2015-20, the fastest growth amongst all UK regions.rn3. London's employment is forecast to continue growing strongly and to expand by 2.6% in 2012, with business services accounting for almost half of the newly created jobs. It is worth noting that off the back of the robust growth in 2011-12, this will return London's employment to its pre-recession level. However, the impact of slower growth this year is likely to be shown in the labour market in 2013, with employment forecast to remain flat.rn4. Having avoided a double dip in 2011, London house prices are forecast to grow by around 2% in 2012. The weaker labour market performance will be reflected in house prices falling slightly in 2013 and 2014, but we expect them to pick up again strongly over the medium term.