London Economic Outlook Shows Gradual Growth Ahead
The latest forecast from GLA Economics indicates a steady economic recovery for London, suggesting that the city’s real Gross Value Added (GVA) is set to grow by 1.6% in 2025. This growth is anticipated to be supported by easing domestic inflation and an increase in household confidence, despite ongoing global trade challenges and persistent inflation concerns.
Projected Economic Growth
According to the forecast, GVA growth is expected to gradually rise to 1.7% in 2026 and 1.9% in 2027. This trend reflects a more stable macroeconomic environment that should bolster the city’s economic performance over the next few years.
Labour Market Trends
The labour market is also predicted to see an uptick, with workforce jobs in London expected to grow by 0.8% in 2025. This comes as the job market cools from the rapid recovery seen in the aftermath of the pandemic. Job growth is projected to increase to 1.0% in 2026 and reach 1.3% in 2027, driven by stronger demand for labour and a return to historical employment trends.
Household Income and Spending
In terms of personal finances, household income in London is forecast to rise by 2.6% in 2025, aided by decreasing inflation rates and increasing wages. However, growth is expected to slow to 1.4% in 2026, before rebounding slightly to 1.5% in 2027. Similarly, household spending is projected to increase by 2.5% in 2025, tapering off to 2.4% in 2026 and further to 2.1% in 2027.
Importance of the Forecast
This forecast is significant not only for local policymakers but also for residents who rely on economic stability for both job security and household affluence. As London continues to navigate post-pandemic recovery, understanding these economic indicators can help inform decisions for businesses and households alike.
Source: official statements, news agencies, and public reports.
https://www.london.gov.uk/programmes-strategies/business-and-economy/business-and-economy-publications/londons-economy-today-issue-274-june-2025
