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London is best prepared of UK cities for recession
Danny Brierley29.10.08
LONDON will deal with the impending recession and global economic meltdown better than elsewhere in Britain, new research reveals.
A report published today said the city's global connections and the fact that it is not dependent on one country or industry make it better prepared to deal with the negative growth that brings rising unemployment and increases in the cost of living.
Weeks of plunging share prices, uncertainty over financial markets, falling high street sales and bank collapses led to Prime Minister Gordon Brown and Bank of England Governor Mervyn King finally admitting that Britain was entering a recession.
Figures from the Office for National Statistics showed that gross domestic product fell by 0.5 per cent in the three months to the end of last month, the first such quarterly decline for 16 years.
But along with the South-East and Scotland's central belt, London was named by the National Endowment for Science, Technology and the Arts as the place most likely to thrive during the recession.
Chief executive Jonathan Kestenbaum said: "This research is important because it demonstrates that no region, with the possible exception of London, will be able to withstand the economic crisis in isolation.
"The ingredients for survival in a downturn hinge on the ability to connect with markets that focus on new science, technology and innovation within and beyond the UK.
"Traditionally, the keys to successful innovation were considered to be the ability to create knowledge and exploit it. However, the dynamics are changing. Those who can access know-ledge, bring it home and share it around are more likely to build a healthier economy."
The report said Wales and Northern Ireland were among the weakest placed to benefit from global networks.
Mr Kestenbaum added: "A crisis can be a powerful stimulus for brilliant ideas and new opportunities, but the UK must be flexible and use innovation strengths if it is to come out of the recession stronger."
Reader views (4)
"London is best prepared of UK cities for recession"
The city may be - it is the city's people whp aren't.
- Keith Price, Luton, England
Bit of wishful thinking here to be honest. London, much more than any other British city, is heavily reliant upon financial services and that sector is where many of the jobs will be lost. In truth, this will be the first post war recession to hit the UK where London will be at least as exposed as the rest of the UK and possibly harder hit than many. It will come as a shock, especially to those who watched the horrors of the early 1980s recession decimate many cities from a comfortable distance. Having said that, I doubt that the banking sector would be allowed to die in the way that manufacturing was back then.
- David, London
London of course always does better in a recession. It's here where the most skilled labour resides which in turn spurs on many other industry sectors. Regions with poor skills base will hurt badly. And regions that have expanded on the back of the credit boom, will really suffer. But any economist will tell you this anyway.
- James, London
Seems strange that it does not mention the importance of a shrinking finance industry to London, irrespective of the fact that it is a very entrepreneurial place.
- Nigel, London
