While the rest of the UK is still in a fragile condition, the City of London appears to be thriving in terms of employment. Almost 240,000 were employed at the Square Mile at the end of last year in finance and professional services, over 10,000 more than before the 2007 crash. This is essentially, the reverse of what occurred to employment in this sector across the entire of London, which has seen jobs fall to 665,700 from 691,000 five years ago.
However, the tax contribution from the financial sector to the UK exchequer is still behind compared to the 'boom' years. In 2007 this sector paid £67.8billion, or 13.9% of all UK taxes received by the Treasury. Last year this figure was £63billion, or 11.6% of the country’s tax take.
The mood reflects cautious optimism
Roger Gifford, the 685 Lord Mayor of London who spent most of his life working in the Square Mile for Swedish Bank SEB, argued that ‘the mood is one of cautious optimism’. He claimed that we might have seen signs of recovery in the past but now there is a real chance that speculations and hopes will turn into something substantial. This confidence in the financial market comes hand in hand with the rising stock market this year.
Despite heralding good news for the British economy, Gifford highlighted that this optimism should be treated sensibly. Only in recent weeks the economic news has been positive. The stock market has risen 11.5% this year and the UK economy grew by a 0.6% in the second quarter.
The City of London to become even more attractive
The City started experiencing prosperity and is finding its feet again. The vacancy rate of office buildings in the City fell to 8% from 10.2% in 2009. Tall buildings such as the Walkie-Talkie and the Cheesegrater are expected to be completed by next year, and already 50% of the offices have been already let.
Interestingly, the architecture of the City varies from Roman ruins to post-modern towers, something that gives vividness and personality to the City, which in turn attracts individuals and businesses.
It fact, the City being the financial hub of the UK, enjoys an elitist status with regards to its employment development and growth prospects, therefore bypassing the negative side-effects of the crisis. But the rest of the country will feel much happier only when jobs and growth will be once again spread over the rest of the UK.