Capital gains: London shrugs off Brexit blues with jobs boom
London's economy has remained buoyant, with first quarter job numbers reaching an all-time high, a major new report has found.
Job numbers in the capital reached 5.9m at the end of June, up 1.9 per cent on last year and the highest since records began. It compares favourably to the rest of the UK, where the numbers of jobs grew by 0.5 per cent.
Unemployment has fallen to 255,000, down 0.4 per cent, according to the Centre for London’s report.
The report, dubbed The London Intelligence, also highlighted the recent PMI for business confidence, which found that London was more optimistic than the rest of the country, standing at 56.2 in June, the highest level since October last year.
Brexit might not be dampening job creation, but it does appear to be having a knock-on effect on the capital’s desirability as a place to work, alongside the cost of living crisis, the report argues. The analysis has found that London had the slowest rate of population growth for over a decade and almost half the rate of the previous year.
Net migration was down 34 per cent on the previous year, and the lowest level since 2013, while net internal migration saw a balance of 106,000 people move out of the capital, suggesting “people are looking for an alternative to London to live and work”.
Using ONS data, the report highlights that while 416,000 Londoners moved across London borough boundaries over the year, some 336,000 Londoners left the city, and only 230,000 individuals from the rest of the country made their home here.
People in their mid-20s to 30s formed the largest group leaving London. Although the commuter belt was among the most popular destinations, much of the exodus trended towards Birmingham, Bristol and Brighton. As well as house prices – which were up 2.8 per cent in the year to May 2018, quality of life indicators such as crime and pollution, worsened over the last year.
Silviya Barrett, research manager at the Centre for London said: “The strong employment numbers and buoyant economic performance are encouraging against the background of continuing political uncertainty around Brexit. However, declining pay levels and stalling productivity are signs that there could be stumbling blocks on the horizon.
“These data also indicate population growth may be levelling out, though it’s too early to say whether this is a temporary blip, perhaps reflecting post-EU referendum uncertainty, or the beginning of a longer-term trend.
“While some might interpret the drop in migration and population growth as easing the pressure on infrastructure and public services, in the longer term, it has the potential to threaten their viability and significantly damage our economy.”
Vicky Pryce, board member at the Centre for Economics and Business Research, hailed the news on job creation, but warned that housing affordability and rising living costs were “encouraging an exodus”.
“Any loss of EU workers and the likelihood of services not being covered by any Brexit deal would leave the City particularly vulnerable,” she said.