Capital lures 1.8m from abroad

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Research by the Bank of Scotland also showed that between 1998 and 2007 nearly two million people moved out of the capital to other parts of Britain, while 1.6 million moved to it. This two million was equivalent to 26 per cent of the city's population in 2007.

Births, deaths and migration meant that London's population rose by 370,000 over the 10-year period.

Meanwhile, a leading economist today predicted that many City workers will head abroad to find jobs during the recession.

John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: "You are likely to see financial sector workers who have lost their jobs moving to Dubai or Indonesia, especially if they are young and without families."