Afternoon:
10°c
Recession 'to hit capital worse than rest of UK'
Jonathan Prynn17 Apr 2009
London will be hit far harder by the recession than the rest of the country, suffering a longer and deeper downturn as a result, a report claims today.
The capital's heavy dependence on the City and Canary Wharf means it is more exposed to the global financial crisis than any other part of Britain, according to the CEBR think tank.
"The economic crisis in London is currently in full swing" said the report's author, CEBR economist Richard Snook. The group also predicts that unemployment will rise to more than 10 per cent and average wages will fall because of bonus cut-backs.
Chancellor Alistair Darling will reveal Treasury figures in his Budget next week showing how bad the Government thinks the recession is likely to be.
The CEBR predicts that London's GDP will shrink by 5.7 per cent this year, compared with about 3.5 per cent nationally. A one per cent fall is forecast for next year, taking the capital's economy to the size it was in 2005 at £180billion.
Recovery will only start in the second half of next year and accelerate as the Olympics approach in 2012. The City "economy" will shrink by 11 per cent this year, and "there will be no return to previous boom times due to tighter regulation and corporate governance", the report says.
Reader views (12)
Thank you Sarah Bradshaw of Enfield Middx; I know Enfield very well; they have cider drinkers there as well; believe it or not.
I may be living in the past in your eyes; but that is better than thinking that Jeremy Kyle or Tricia; represents the average Northern Person just because a lot of Scots seem to appear on those shows etc; mind you saying that; I have seen Londoners on those shows as well; probably Northern Londoners from Enfield.
To think that most Northerners would be starving if it was not for Londoners; is blindness in total; even today without our heavy industries; the North still makes more goods than the South does, or even could make etc; although their Financial Services don’t make the vast profits London once did long ago; most of these profits by the way went into off-shore bank accounts and tax havens; very little went to H.M Government.
But like a lot of Northern people that just might drink cider and take drugs; even those not featured on the Jeremy Kyle and Tricia shows; I point out this simple fact to you; from a survey taken 10 years ago; which was well publicised in all the medias; that 99% of £5 notes tested in London, contained traces of cocaine from nose sniffing coke addicts in the city of London etc, ok its not actually cider; and not many city workers go on the Jeremy and Tricia shows; but cocaine is used for much the same reason as cider is; to get spaced out etc; it’s a matter of choice; coke or cider; North or South.
- Mickyinlondon, london, 19/04/2009 11:23
Report abuse
Erm, excuse me but London cannot possibly suffer worse than anywhere else. South Wales has been experiencing the worst downturn in many years with factories, shops, entire town centres boarding up and closing down. Jobseekers are conscious that there aren't any jobs! JobCentres know there is no work for their "clients". The black hole has been created in London, not here, with a Government "giving" money it doesn't have to subsidise the bonus culture that exists in the City of London and bailing out ailing banks and industries that caused this recession. While the cost of living in London is higher than in this part of the world, incomes (or lack of) reflect that fact. London and Londoners do better than most of the rest of Britain, recession or not.
- Chris, Aberdare, Rhondda Cynon Taf, South Wales, 17/04/2009 17:24
Report abuse
To Micky in London - methinks you are seriously living in the past, luv! The north of today is not the one you describe. Drugs run rampant and many of the people are not just unemployed but unemployable. You only have to have seen a couple of episodes of Jeremy Kyle or Tricia to know that - and going on shows like that is the most that most of them can aspire to! Most of the people up there would be starving if it wasn't for the likes of us. Or at least unable to afford their precious cider or drugs. And before you ask, yes I am of a more mature vintage!
- Sarah Bradshaw, Enfield, Middx, 17/04/2009 17:01
Report abuse
Dear D Woodstock of London.
I live on the planet earth, which is near Oxford Street.
Would you for one minute think that the great cities of Manchester, Liverpool, Birmingham etc; and the likes of Yorkshire and Lancashire to name just a few; were not the bases of the Industrial Revolution; filled with industries that sold to the world, the first ever mass produced goods ever made in the whole world; were full of benefit sponging lazy gits; if you do think that; then you have never been north of Watford in your life.
I do not doubt that many are on the dole up north; as well as in London itself; like ex miners for one group etc; but today’s world is a financial services world; not a manufacturing world etc; Margaret Thatcher and the Adam Smith Institute helped that state of affairs to materialize etc.
Young Southerners cannot remember the great British goods made in those days; and sought after all over the world; most do not remember that even Rolls Royce was one British etc; I do not have the space to give you all the things I remember from even my short time alive; but trust me on this D.Woodstock; Northerners are far more hard working and honest; than you would ever know.
And their sponging rate is no higher than Londoners sponging rates.........Mick.
- Mickyinlondon, london, 17/04/2009 16:22
Report abuse
MickyinLondon - What planet are you on? The reason thousands upon thousands of families across the north of England regard a benefits-fuelled lifestyle as normal is because Londoners are doing all the work to support them.
- D Woodstock, London, 17/04/2009 14:52
Report abuse
Presumably those awfully nice people outside the South East won't mind in the slightest when spending cuts have to be imposed to make up for the huge decline in tax revenues from the South East and more specifically the City as a result of job losses, etc.
- Anne, London, England, 17/04/2009 14:26
Report abuse
It is poetic justice really; the North of England has had it tough for decades, not to mention centuries; whilst London lived the high life at their expense most of the time.
And it is even more poetic when you consider that all the London Financial Experts caused their own down-fall; a bit like the fall of the Roman Empire.
I am a Londoner by the way; which is more shame on me; than the North of England.
- Mickyinlondon, london, 17/04/2009 12:42
Report abuse
So it is going to get worse.......so all those stories about green shoots are spin then.
- Grumpy As Hell, wimbledon, 17/04/2009 12:27
Report abuse
Am I the only one who hasn't got a clue who the CEBR is?
- Marianne, SW France, 17/04/2009 12:08
Report abuse
I could see this in 2007. Why is everyone else so slow?
- Dave Davies, Basingstoke, 17/04/2009 10:25
Report abuse
The alleged recession will not make a scrap of difference to any MP's or bankers.
I stopped believing government spin and waffle, smoke and mirrors long ago.
Next, we shall have Gormless Brown telling us we have never had it so good.
Absolutely pathetic.
- Reuben Camara, Morecambe UK, 17/04/2009 10:22
Report abuse
That's because the rest of the country is financed by London & the South East, especially those Labour voting sectors where 80% of the work force is comprised of civil service jobs.
- Bob, Cheam, 17/04/2009 10:13
Report abuse
