The City of London has stretched its lead as the strongest economy in the UK over the past decade confounding critics who expected the City to shrink after the banking crisis, shows research by UHY Hacker Young, the national accountancy group.
UHY Hacker Young says that despite predictions that the City would lose its role as the powerhouse of the UK after the crisis, its economy has actually grown dramatically, at double the speed of the national average since the credit crunch.
The City’s growth rate in Gross Value Added (GVA) was 24 per cent since 2008, increasing to £292,855 from £236,356 per head, while the national average was just 12 per cent over the same period from £22,873 to £25,601.
GVA is a measure of an area’s contribution to the UK economy based on the value of the goods and services it produces per capita.
The City still has the highest amount of GVA in the country, with the remaining areas in the top five all located in central London. The City’s GVA is still over a third, or £71,700, ahead of its nearest rival, Westminster.
The City is now also 1,900 per cent ahead of the poorest performing urban area, the Wirral, which had a GVA of just £14,523 per person.
UHY Hacker Young adds that in addition to maintaining its core financial services industry the City has also, since the crisis, reinvented itself as a centre for ecommerce and fintech services. Areas within the City and along its fringes, notably around Shoreditch and Old Street, are now growing hubs for fintech companies, particularly in shared working spaces such as one of the 5 WeWork locations now located in the City.
Colin Jones, partner at UHY Hacker Young, comments: “Despite the predictions of some would-be Cassandras, the City has actually increased its importance to the UK economy in the wake of the banking crisis.
“When the crisis was at its height, many predicted a decline in the importance of the City’s economy, but instead it has proven to be resilient and still easily outpaces other major UK cities. Indeed, its growth is still primarily driven by its huge wholesale financial services industry.
“Along with its traditional strengths in investment banks and professional services firms, the City is now also host to more fintech and non-traditional financial services industries. Over the past decade, London has become a key global hub for fintech companies.”