State of London

Introduction

In June 2026, the GLA’s City Intelligence Unit published the latest edition of its State of London report. The report provides over 100 datasets about London’s economy, society and environment giving a broad picture about how the capital is performing. The data are structured around what are called “London-level outcomes” – statements that describe the broad outcomes the Mayor of London is aiming to achieve for the benefit of the city and its residents.

The report is published for the first time as a digital-first edition, with interactive charts and data available to download as well as links to related analysis. This is intended to improve the accessibility, timeliness and transparency of the data, and to make it easier for users to explore.

This supplement draws out the main economic messages from the report in summary format. Readers are encouraged to explore the full digital report for the most current data.

London in Figures

This section gives a sense of London’s scale and national economic significance. London is home to 9.1 million people, 15.5% of the UK population. The economy is worth an estimated £618 billion at current market prices, 22.7% of national GDP, it supports 6.4 million jobs and hosts some 538,000 VAT- or PAYE-registered businesses, almost a fifth of the UK total.

Output per head, at £69,100, is well above the figure for England as a whole (£40,400).

London’s local economy contributed £255 billion worth of exports (around 31% of the UK total). It also made a net fiscal contribution (taxes raised less public spending), of £48.8 billion according to the latest estimate for 2024-25 – the only region other than the South East to make a net contribution to the Exchequer.¹

Global competitiveness and investment

Despite a turbulent decade, London remains a globally competitive metropolis demonstrating its resilience to global shocks including the pandemic and the UK’s departure from the European Union. Across four widely cited global city indices, the capital ranks either first or second behind only New York.

London also retains a strong investment position, attracting more inward FDI than any other major European city in 2024, ahead of Dublin and Warsaw.² The capital attracted 361 foreign direct investment projects in 2025, with associated capital expenditure of £9.5 billion (Figure A1). This included a spike to £5.7 billion in the final quarter, driven in part by some large investments in data centres. Demand for data centres is something to be monitored closely, as sustained growth will have implications for utilities infrastructure.

Growth, productivity and business conditions

The latest ONS data show real Gross Value Added (GVA) grew by 0.3% in 2023, and GLA Economics estimates point to a modest strengthening since, with growth of around 1.1% in 2024 and 1.9% in 2025 (Figure A2). The 2024 and 2025 figures are estimates and nowcasts rather than ONS outturns, and should be treated as provisional.

The cumulative recovery picture is less strong than the annual growth figures alone suggest. London’s GVA in 2025 was an estimated 5.1% above its 2019 level, compared with 5.9% for the UK as a whole. This largely reflects the severity of London’s initial pandemic shock. The city was more exposed to the sectors hit hardest by lockdowns and mobility restrictions, including hospitality, retail, tourism and other face-to-face services, as well as international travel and commuting. The strong rebound of 2021 and 2022 was therefore partly recovery from a deeper contraction, rather than evidence of a sustained acceleration.

Productivity is the more persistent structural concern. London is still the UK’s most productive region, with real GVA per hour worked of £57 in 2023, around 29% above the UK average of £44 (Figure A3). But productivity growth has been weak by historical standards, continuing a pattern of relative stagnation that predates the pandemic and stretches back to the period after the financial crisis in 2008. The most recent productivity data carry ONS methodological caveats and a reporting lag and should be read with some caution, though they do not overturn the underlying picture of weak growth.

Other, more timely, indicators related to economic performance are more encouraging. Consumer confidence in London has been positive almost continuously since early 2024, reaching +15 in February 2026, against −19 for the UK as a whole, which has not recorded a positive reading since 2016 (Figure A4). Business sentiment has been similarly resilient, with the PMI measures of business activity (+7.8) and new orders (+6) both signalling expansion in early 2026.

Labour market, skills and job quality

London remains a high-skill, high-wage labour market, but signs of softening became clearer through 2025. The employment rate stood at 74.3% in the three months to February 2026, just below the UK rate of 75%. This series should be read with care: the Labour Force Survey is currently classed as an “Official Statistic in Development”, and with a margin of error of around ±1.4 percentage points, recent movements between roughly 74% and 76% are unlikely to reflect a genuine change in the underlying trend.

A clearer signal comes from involuntary worklessness, which combines the unemployed with those who are economically inactive but would like to work. On this measure, some 310,400 unemployed Londoners and a further 282,600 inactive Londoners who wanted a job together accounted for 9.5% of the working-age population in the year to December 2025, up from a low of 7.0% on the same combined measure in March 2023 (Figure A5). With the unemployment component rising fastest, and the headline unemployment rate reaching 7.4% in March 2026, the recent increase points to weaker labour demand rather than rising inactivity. More on the dynamics of London’s labour market can be accessed in the GLA Economics ‘London Labour Market Update’.

London’s skills base remains a strength and continues to improve. The capital has the most qualified workforce in the country, with 77% of working-age residents holding a Level 3 qualification or above, against 69% across the UK.

Inequality, poverty and the cost of living

The capital supports many high-paying jobs, but the gap between its richest and poorest households is wide. The latest DWP data put London’s 90:10 income ratio, after housing costs, at 11. This means that the top tenth of households receive around eleven times the income of the bottom tenth, up from 9 a year earlier and more than double the figure of 4.8 for the rest of the UK. Londoners in the lowest income decile have incomes 39% below their counterparts elsewhere in the UK after housing costs, while those in the top decile are 36% better off (Figure A6).

High inequality is accompanied by high rates of relative poverty. Around 19% of Londoners, some 1.7 million people, live in relative poverty after housing costs, the highest rate of any UK region and rising for a second consecutive year to a level now above its pre-pandemic benchmark. Inner London’s rate, at 23%, is particularly elevated. These estimates carry some uncertainty owing to pandemic-related survey disruption and are best read as a trend rather than a precise annual figure.

Cost-of-living pressures persist beneath the headline numbers: around 15% of Londoners reported struggling financially in January 2026, down from a peak of about 23% in mid-2023 but still above early-2022 levels, and roughly one in nine households were behind on at least some of their bills.

Housing pressure and homelessness

Housing remains one of the clearest constraints to shared prosperity in London. GLA polling found that 34% of Londoners had either fallen behind, or struggled to keep up, with rent or mortgage payments in April 2026. The sharpest measure of unmet housing need is the number of households in temporary accommodation arranged by London boroughs, which reached 75,800 at the end of September 2025, up from 68,480 a year earlier and the highest level since the series began in 1988 (Figure A7). London now has more households in temporary accommodation than the rest of England’s regions combined; just over 50,000 of these households included children, affecting close to 99,200 children. Rough sleeping has also continued to rise, reaching 22.9 people per 100,000 residents in December 2025, around 7% higher than a year earlier.

Final considerations

The 2026 State of London report describes a city that remains globally competitive and economically resilient. London continues to be the UK’s largest and most productive regional economy, with positive indicators/data on investment and the skills of the workforce. At the same time, it shows that London’s prosperity is not evenly shared: productivity growth remains weak, the labour market softened over the course of 2025, and high housing costs, poverty and inequality continue to impact living standards.

The pressing question is no longer recovery from the pandemic, but whether London can lift its productivity and convert its economic strength into more broadly shared gains in living standards, against persistent pressures from housing costs, poverty and inequality.

The full picture, across economy, society and environment, can be explored in the digital State of London report.