London symbols are tumbling like dominoes. Beefeaters are being laid off, TechHub — the city’s answer to Silicon Valley — has gone bust and love-it-or-hate-it Cereal Killer Cafe has shut up shop. Even the Tower of London’s famed ravens, missing the usual tourist hustle and bustle, are fleeing.
The UK’s capital generates roughly a quarter of the country’s economic output and is home to about 13 per cent of its population. It is expected to bear much of the pandemic-induced economic pain. The Greater London Authority forecasts gross value added — a measure of contribution to gross domestic product — will fall 16.8 per cent this year.
Covid-19 has turned some of London’s strengths into weaknesses. Take density. As lobby group London First’s John Dickie notes, few global cities share its cheek-by-jowl nature. Tech start-ups in California drive to investors; in London they can walk. Wall Street bankers who want to bend politicians’ ears board a flight to Washington; in London you can be at the Houses of Parliament from the City within half an hour. Social distancing has scattered that ecosystem.
Similarly, the capital’s galleries, concerts and theatreland acted as a magnet for tourists — nearly 22m last year, according to VisitBritain, spending almost £16bn. Their absence can be felt at empty shops and eateries around the nexus of the West End.
Luckily, London has other economic engines. Financial services is still firing. GVA in that industry is expected to fall just 2.6 per cent this year. Companies are still being bought, sold and listed; books are still being audited. Professional services may be conducted from the suburbs rather than the City but workers are still at desks of some description.
The lingering question is what changes wrought by the pandemic will remain. Should working from home continue, city eateries, office space and transport will suffer.
Transport for London, which reported a plunge in metro passenger numbers following lockdown in March, received a £1.6bn bailout in May. It now seeks a further £4.9bn. This is another liability spun by strength. TfL was able to count on its expensive fares to cover almost three-quarters of its operating costs. That dependency, almost double the proportion at New York’s Metropolitan Transportation Authority, has left it exposed as people stopped travelling.
London no doubt will struggle. But like all great cities it has the ingredients — both for work and play — to bounce back.
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