London’s pulling power is in decline

Ever since the 1986 Big Bang, London has been “in the ascendant”, The deregulation of financial services has had an agglomerative effect: “the creative industries and a thriving tech centre have joined the staples of banking, asset management and business services” to create “the world’s most global city”. In recent years, however, there have been warning signs of decline. London scores poorly in the Office for National Statistics’ rankings of well-being and satisfaction – partly because house prices remain double those elsewhere. But the onslaught of Covid-19 could pose “a new and more profound danger to the capital” – even if it succeeds in crushing property values – because it threatens two factors central to London’s success: “fun and foreigners”. Particularly when combined with Brexit. “London is unlikely to slip back into the dismal state it was in before the mid- 1980s”, but still, its pulling power is likely to wane. As one fund manager puts it: “London without the culture and the restaurants is just a more expensive Frankfurt, with more congestion.”