Amid slowing growth in the UK, increasing instability around the world and rapid technological change, the new year has got off to an uncertain start.
In our latest What Next for London podcast? our Chief Executive John Dickie, Andy Silvester of The Times, Nicola Millard of BT and Adam Yousef of the Greater London Authority cut through the noise to set out what the next 12 months could hold for the capital. They discuss why:
1 London holds the key to the UK’s economic revival
With the economy unexpectedly shrinking in October, and the Office for Budget Responsibility downgrading its growth and productivity forecasts, the Government has work to do to make its economic aims a reality. London accounts for nearly a quarter of the UK economy, and supports multi-billion-pound country-wide supply chains, so the Government’s growth mission can only be achieved if the capital is thriving.
Adam highlights that the capital’s productivity has taken a hit over recent years: “the national productivity malaise is in part a result of London’s productivity slowdown.” He stresses that “no viable strategy to realise the Government’s growth mission can succeed without London being involved.”
2 Employers will remain cautious on hiring
Rising job losses have disproportionately impacted London – the capital has the highest unemployment rate of any region of the country, despite its workforce being the most qualified.
Andy points to last year’s hike in employer costs and changes to the business rates system as among contributors to employer caution. He also highlights the reasons why London remains a magnet for top global talent: “all of the old advantages that London has, from time zone to language, remain perfectly reasonable. Our legal sector remains number one in the world. Our insurance sector remains number one in the world… and actually there are signs of life in our capital markets as well.”
3 The Government can drive growth at minimal cost
With the public finances stretched, Ministers need new interventions that can spur growth at minimal cost. What could these measures include?
“Planning [reform] is the obvious one,” says Andy, highlighting government efforts to date in this area. He also calls for policymakers to learn lessons from London’s previous infrastructure successes: “could we be looking at more innovative ways of funding a Bakerloo Line Extension? of course we could… we’ve shown we can do these things.”
4 Artificial Intelligence and hybrid working are here to stay
Nicola strikes a note of caution and optimism about what the rise and rise of AI could mean for the capital’s workforce: “I think there’s simultaneously great progress and also great frustration with AI… it’s not necessarily replacing people. The power I’m seeing with AI is how do you actually marry the human brain with AI and improve outcomes, rather than necessarily [having a] step change in productivity.”
Nicola also weighs in on the future of hybrid working, saying a mixed approach is here to stay: “if you spend five days a week working from home, you are engaged but you’re not thriving… if you’re fully returned back to the office, you’re actually both less engaged and less thriving.”
5 Tackling London’s housing crisis is a must in 2026
“A 1% improvement in affordability of housing in London alone could boost London’s total output by over £7 billion,” says Adam, as he warns that a failure to tackle the capital’s housing shortage “not only makes inequality… an even bigger problem than it already is” but also “harms recruitment and retention of talent.”
Andy highlights that the Government and Mayor’s new package of emergency housebuilding measures marks “a step in the right direction” but cautions that more needs to be done to get shovels in the ground, including around regulatory reform.
6 London’s political landscape will likely fragment in May
“I’ve never known London to be so uncertain about what the result of a set of local elections will be as it is now,” says Andy, looking ahead to polling day in the Spring. He suggests that “the public is increasingly open to more radical policy shifts than are immediately obvious… I think there is now a growing feeling, particularly in London, that real genuine change needs to come.”
Listen to this episode of What Next for London? in full on our website and subscribe to receive future episodes on Apple and Spotify.