Lecture 10 The Economy of the uk

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Bishopsgate, in the City of London.

London is a major centre for international business and commerce and is one of three "command centres" for the global economy (along with New York City).

As Europe’s largest city’s economy, year-by-year, London's economy generates approximately 19% of the UK's GDP or US$418 billion in 2005; whilst the entire London metropolitan area generates approximately 30% of UK GDP or US$660 billion in 2005 .

London shifted to a mostly service-based economy earlier than other European cities, particularly following the Second World War. London's relative success as a service industry and business centre can be attributed to a large array of factors: English becoming the new lingua franca, its former position as the capital of the British Empire, its close relationship with the US and various countries in Asia, its location in a central time zone that allows it to act as a bridge between the US and Asian markets, English law being the most important and most used contract law in international business, the multi-cultural infrastructure (schools, worshipping places, cultural and social organisations), relatively low taxes, particularly for foreigners - non-UK domiciled residents do not get taxed on their foreign earnings, a business friendly environment (e.g. in the City of London the local government is not elected by the resident population but instead by business - the City of London

Reuters, Barclays and many of the largest law firms in the world. London handled 31% of global currency transactions in 2005 — an average daily turnover of US$753 billion — with more US dollars traded in London than New York, and more Euros traded than in every other city in Europe combined.

The headquarters of Reuters, the world's largest news agency. More than half of the UK's top 100 listed companies (the FTSE 100) and over 100 of Europe's 500 largest companies are headquartered in central London. Over 70% of the FTSE 100 are located within London's metropolitan area, and 75% of Fortune 500 companies have offices in London.

Along with professional services, media companies are concentrated in London , and the media distribution industry is London's second most competitive sector. The BBC is a key employer, other broadcasters also have headquarters around the city. Many national newspapers are edited in London, having traditionally been associated with Fleet Street in the City, they are now dispersed across the capital. Soho is the centre of London's post-production industry.

Tourism is one of London's prime industries and employed the equivalent of 350,000 full-time workers in London in 2003 . London is a popular destination for tourists, attracting 27 million overnight-stay visitors every year, second only to Paris.

From being the largest port in the world, the Port of London is now only the third largest in the United Kingdom, handling 50 million tons of cargo each year. Most of this actually passes through Tilbury, outside the boundary of Greater London.

The Mayor of New York Michael Bloomberg has recently said the reason for New York's loss as the world financial capital to London has been due, in part, to Britain's more easy going regulatory, legal and immigration systems.

Over 85 percent (3.2 million) of the employed population of greater London works in service industries. Another half a million employees, residents of Greater London,

work in manufacturing and construction.

London has five major business districts: the City, Westminster, Canary Wharf, Camden & Islington and Lambeth & Southwark.

Business District	Office Space (ml)	Business Concentration
The City	7,740,000	finance, brokering, insurance, legal
Westminster	5,780,000	head offices, real estate, private banking, hedge funds, government
Camden & Islington	2,294,000	creative industries, finance, design, 1 art, fashion, architecture
Canary Wharf	2,120,000	banking, media, legal
Lambeth & Southwark	1,780,000	accountancy, consultancy, local government

London's largest industry remains finance, and its financial exports make it a large contributor to the UK's balance of payments. Over 300,000 people are employed in financial services in London. London has over 480 overseas banks, more than any other city in the world. More funds are invested in the City of London than in the next top ten European cities combined,and more international telephone calls are made to and from London than any other point on the planet The City is the largest financial and business centre in Europe and has recently begun to once more overtake New York City, partly due to strict accounting following the Sarbanes-Oxley Act and a tightening of market regulations in the United States. The Mayor of New York Michael Bloomberg has said that New York risks losing its title of world financial capital to London because of Britain's more easy- going regulatory, legal and immigration systems.London is home to banks, brokers, insurers and legal and accounting firms. Multi-million pound bonuses are commonplace and serve further to drive up house prices in the capital. A second, smaller financial district is developing at Canary Wharf to the east of the City which includes the global headquarters of HSBC, Reuters, Barclays and many of the largest law firms in the world.A long with professional services, media companies are concentrated in London and the media distribution industry is London's second most competitive sector. The BBC is a key employer, while other broadcasters also have headquarters around the city. Many national newspapers are edited in London, having traditionally been associated with Fleet Street in the City, they are now primarily based around Canary Wharf. Soho is the centre of London's post-production industry.