By GDP, London is in 2005 the sixth city in the world and second in Europe after Paris. Greater London makes about 20% of UK GDP, and the London metropolitan area about a third. Productivity is significantly higher than the national average. Strongly tertiarised, London is experiencing significant specialization in finance. The British capital is the leading financial center of the world and a major international business centers. Immigration plays a major role, it relates to people of diverse qualifications, but a feature of the town is its ability to attract high earners.
Economic inequalities are strong. London has many pockets of poverty and unemployment is higher than the national average (5.5% in the UK in the second quarter of 2006 against 7.7% in London and up to over 10% in some neighborhoods the Inner London) and 53% of children in these areas live in poverty.
The London economy was oriented towards services much earlier than other European cities, especially after World War II. The success of London in the service sector was mainly due to several factors:
- English is a language of international communication;
- the capital position of the British Empire;
- its special relations with the United States and several Asian countries,
- its geographical position that allows its office hours to match those of other countries that account for 99% of world GDP;
- English law is the most used law in international trade agreements;
- multicultural infrastructure (schools, places of worship, cultural and social organizations);
- relatively low tax level especially for foreign (non-domiciled UK residents do not pay taxes on profits earned abroad) – however, the county tax paid each month is very high (about 100-150 pounds/month/housing);
- good transport infrastructure, especially in airport traffic;
- a deregulated economy with little government intervention.
Services and finance
Approximately 85% of the population of Greater London (3.2 million people) work in the service sector. 500,000 people work in the industry and construction (in equal proportions).
London has five major business centers: the City, Westminster, Canary Wharf, Camden & Islington and Lambeth & Southwark.
|Business District||Office Area (m²)||Activity area|
|The City||7 740 000||Finance, brokerage, insurance, law|
|Westminster||5 780 000||Headquarters, real estate, banking, hedge fund administration|
|Camden & Islington||2 294 000||Finance, artistic creation, fashion, architecture|
|Canary Wharf||2 120 000||Bank, media, legal departments|
|Lambeth & Southwark||1 780 000||Accounting, consulting company, local government|
The main economic activity in London is the financial sector whose financial exports (that is to say the business services provided by London firms to foreign companies in the financial services sector (regardless of property)) greatly contribute to the balance of payments of the United Kingdom. Approximately 300 000 people work in the finance industry in London, home to over 480 banks, more than any other city in the world. Each year, it invests more money in London than in the following 10 European cities together. The City is the largest European business center and compete increasingly New York, particularly because of the Sarbanes-Oxley laws that increase the accounting requirements for companies listed on the stock market on Wall Street. In a recent study published by Mastercard, London surpasses New York in four of the six areas of study including economic stability, ease of doing business and the volume of financial flows. The New York Mayor Michael Bloomberg said that New York risked losing its status as financial capital of the world in favor of London because of the law and less stringent regulation and immigration systems of the United Kingdom.
A second financial center develops in Canary Wharf, east of the City, and in the headquarters of HSBC and Barclays banks, Reuters and many of the largest law firms in the world. In 2005, London handled 31% of transactions on the foreign exchange market and daily deals around 753 billion dollars, more than in New York.
More than half of the top 100 UK companies (FTSE 100) and over 100 of Europe’s 500 largest companies are headquartered in London. Over 70% of FTSE 100 companies are headquartered in the urban area of London and 75% of Fortune 500 companies have an office in London.
The media is particularly concentrated in London and the media distribution industry is the second most competitive sector. The BBC is a key employer in the city, while many other media have their headquarters in London. Many national newspapers are edited in the city and have long been associated with Fleet Street in the City. Soho is the heart of the post-production industry.
The Port of London was the largest in the world but now comes in third position in the UK. 50 million tons of cargo passing each year. Most of these goods, however, pass through Tilbury, located outside the boundaries of Greater London.
London is a major tourist destination in the world. This sector generates between 280 000 and 350 000 jobs according to sources. In 2008, tourism revenues accounted for £ 10.5 billion. In 2014, London received 17.4 million foreign tourists, for a total of about 28 million.
London boasts of its status as English capital in Europe and annually attracts many mainland students that came to learn the English language. A significant saving of the student tourism has developed around this windfall, some not hesitating to enjoy through practices at the limit of legality.
The main London attractions are concentrated in the West End, which includes department stores of Oxford Street, theaters and neighborhoods such as Soho, Covent Garden, Mayfair, Piccadilly Circus and Leicester Square. The most famous monuments in London are the British Museum, the Tate Gallery, Tate Modern, Madame Tussauds, the Houses of Parliament and Buckingham, the Imperial War Museum, the Science Museum, the National Gallery, the National Portrait Gallery, the Tower Bridge, Big Ben, the Tower of London, London Eye, St Paul’s Cathedral and Arsenal Football Club Museum.
Translated from Wikipedia