London hit hardest by Covid economic downturn

London’s jobs market is experiencing a deeper crisis than the rest of the UK, according to a new analysis.

A new report by Centre for London in association with the Policy Institute and the Centre for Urban Science and Progress at King’s College London warns unemployment in the capital looks set to rise as recruitment remains subdued.

Early estimates for October indicate that there were 200,000 fewer employees on payroll in the capital than the same time in the previous year.

This number has fallen more steeply in London than in the rest of the UK.

Payrolled employees includes employees who are currently furloughed – so it is likely that a steeper decline has been avoided by the scheme.

The number of non-UK nationals in work has declined particularly sharply, which will have had a significant impact in London where these workers made up 25% of employees last year.

In addition, 5% of Londoners were claiming unemployment-related benefits in October, ahead of the extension of the furlough scheme to March 2021.

The number of claimants is likely to rise as an increasing number of employed people on low pay are now eligible for this support.

But the report also notes that rents in central London have seen a huge drop, with average rents in Zone falling by 25% compared to last year.

Meanwhile in Zones 3-6, rents have increased, which has likely worsened the financial squeeze on Londoners looking for somewhere to live in these areas.

Movement across London remained largely unchanged through the summer and early autumn, with trips to workplaces and shops still 40% below their pre-virus levels.

London has seen a lower proportion of workers return to offices compared to other global cities before the latest national lockdown.

This points to a deeper disruption to London’s economy, particularly in the city centre where

‘London’s economy struggled to get back on its feet through the summer, as tourists and commuters stayed home,’ said Centre for London’s deputy director, Richard Brown.

‘As autumn turns to winter, jobs losses are starting to mount, hitting lower paid workers in sectors such as hospitality particularly hard.

‘The chancellor’s support packages should help soften the blow to Londoners over the next few months. And with vaccines and enhanced testing regimes on the horizon, business confidence remains relatively buoyant – despite the persistent risk of a no-deal Brexit.

‘With continuing support from government, and recognition of how deeply the capital’s communities have been affected, London can be ready to rebuild and to lead the UK’s recovery from a tough winter.’

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