London sees 2012 super growth’ after global recession

By Mike Brooke

TOP economic forecasters tonight predicted London will reemerge after the recession as the fastest-growing major European financial centre and one of the fastest growing global cities.

London was hit hard by the world recession, with an eight per centre loss of jobs in the financial sector and our Gross Domestic Product, the yardstick by which economic growth is measured, shrinking by 4.5 per cent.

But now the Oxford Economics think tank says London will exceed New York and Tokyo with a 3.4 per cent annual growth from now until 2012, the year we stage the Olympics.

Thereafter, it forecasts London being the fastest-growing major European city with accelerated GDP growth of four per cent a year up to 2020, according to the report undertaken for Savills international real estate.

“The crisis which triggered the global financial meltdown produced a seismic shock for all three global financial capitals,” said John Rigg, Savills’ head of international investment. “The impact and consequences were potentially cataclysmic.

“But concerted Central Bank action and the fall in Sterling are causing a rapid recovery. A flood of new overseas investors is seeking London real estate, based on a confidence often absent at home.”

In a hint about the bonus controversy in banking, he added: “It is up to those in government to ensure any new medicine for the financial services industry does not kill the patient.”

The research suggests high rewards attract the best talent from around the world, creating a cluster of efficient businesses and a highly productive regional economy. This in turn supports the high rewards on offer.

But taxation and heavy red tape’ regulations are areas where political intervention could damage London’s prospects, the forecasters warn.