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London’s Economy Today Issue 77 | January 2009 In this issue UK economy in recession and interest UK economy in recession rates cut to their lowest ever and interest rates cut to by Gordon Douglass, Economist, Simon Kyte, Economist their lowest ever ...... 1 and Christopher Lewis, Senior Economist Latest news ...... 1 The UK economy contracted by 1.5 per cent in the fourth Economic indicators ...... 5 quarter of 2008 (see Figure 1), the fastest pace of quarterly Business births decline since the second quarter of 1980. With the economy and closures ...... 9 having already contracted by 0.6 per cent in the third quarter, the UK economy is now in an ofﬁ cial recession for the ﬁ rst time since the early 1990s.

In 2008 the annual rate of economic growth was 0.7 per cent, the weakest growth since 1992. Output declined in virtually every sector of the economy in the fourth quarter, with an extremely steep fall in manufacturing, which declined by 4.6 per cent. Business services and ﬁ nance was actually one of the better performing sectors with a decline of 0.5 per cent in the fourth quarter. Business surveys are currently very weak so despite the depreciation of sterling, there would appear to be few signs of good cheer on the horizon for the UK economy.

Latest news... London Economic Development Snapshot

London Economic Development This periodic report prepared by GLA Economics in conjunction with the LDA Snapshot Issue 08 January 2009 shows the progress made in delivering the objectives set out in the Economic Development Strategy for London. Amongst other things, the report highlights that after two and a half years in which there has been a signiﬁ cant narrowing of the gap with London as a whole, the combined employment rate for the seven most disadvantaged boroughs in London has shown signs of deterioration over the past nine months. Visit www.london.gov.uk/mayor/economic_unit to download this publication. Figure 1: UK % GDP Growth 12 year-on-year % change 10 Source: Ofﬁ ce for % change on previous quarter National Statistics 8

4 2

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-6 1970 Q1 1971 Q3 1973 Q1 1974 Q3 1976 Q1 1977 Q3 1979 Q1 1980 Q3 1982 Q1 1983 Q3 1985 Q1 1986 Q3 1988 Q1 1989 Q3 1991 Q1 1992 Q3 1994 Q1 1995 Q3 1997 Q1 1998 Q3 2000 Q1 2001 Q3 2003 Q1 2004 Q3 2006 Q1 2007 Q3 The High Street faces tough times The economic downturn has hit the High Street with a number of prominent chains entering into administration or closing. The Christmas and New Year period saw the high profi le closing of Woolworths. Other fi rms such as MFI, Adams, Waterford Wedgwood, Zavvi and Whittards also entered administration or closed over the holiday period. Offi ce for National Statistics (ONS) data showed a 1.6 per cent increase in the volume of retail sales in December compared with the same period in 2007, while the value of retail sales actually declined by 0.8 per cent due to heavy discounting. The British Retail Consortium has released fi gures compiled by KPMG that showed a 3.3 per cent decline in like-for-like sales in the UK during December compared with a year earlier (for central London the decline was only 0.7 per cent). The retail trading situation for at least the fi rst half of 2009 is likely to be harsh as rising unemployment dampens household consumption. Interest rates cut to a historic low On 8 January the Bank of England cut interest rates by 50 basis points to 1.5 per cent (see Figure 2) the lowest rate it has ever set since its founding in 1694. This was the fourth cut in interest rates in as many months, which has seen rates fall by 350 basis points since the beginning of October. With the UK economy in recession and the world economy faltering, further cuts are likely in the coming months. Infl ationary concerns are rapidly diminishing as shown by the fall in CPI infl ation to 3.1 per cent in December 2008 from 4.1 per cent in November. RPI infl ation is expected to turn negative very shortly. The credit crunch still reverberating The Bank of England’s 2008 Q4 Credit Conditions Survey showed that the effects of the credit crunch are still being felt. Further reductions in credit availability are expected in the fi rst quarter of 2009, whilst default rates have already risen. Meanwhile a CBI/PricewaterhouseCoopers survey showed that the volume of business conducted by the fi nancial services sector with industrial and commercial companies fell in the fi nal quarter of 2008. A majority of fi nancial services fi rms thought that the volume of business would fall again in the fi rst quarter of 2009.

London’s Economy Today | Issue 77 Today Economy London’s Figure 2: Bank of 8 England’s Repo rate and 7.5 United Kingdom, Policy Rates, Bank Rate the 3 month London 7 United Kingdom, Interbank Rates, BBA LIBOR, 3 Month, Fixing, Pounds Sterling Inter-Bank Offered Rate 6.5 (LIBOR) 6 5.5 Last data point is 5 28/01/09 % 4.5 3 Source: EcoWin 4 3.5

2.5

1.5

1 02/01/98 02/04/98 02/07/98 02/10/98 02/01/99 02/04/99 02/07/99 02/10/99 02/01/00 02/04/00 02/07/00 02/10/00 02/01/01 02/04/01 02/07/01 02/10/01 02/01/02 02/04/02 02/07/02 02/10/02 02/01/03 02/04/03 02/07/03 02/10/03 02/01/04 02/04/04 02/07/04 02/10/04 02/01/05 02/04/05 02/07/05 02/10/05 02/01/06 02/04/06 02/07/06 02/10/06 02/01/07 02/04/07 02/07/07 02/10/07 02/01/08 02/04/08 02/07/08 02/10/08 02/01/09 UK banks in trouble as the Government makes a raft of new announcements The Royal Bank of Scotland (RBS) announced on 19 January that it expected to have suffered more than £20 billion, and perhaps as much as £28 billion, in losses in 2008, which would make it the largest British corporate loss in history. UK banking shares fell dramatically with this news and concerns over the creeping nationalisation of the UK banking sector by the Government. They have recovered slightly since the publication of a letter by the chairman and chief executive of Barclays on 26 January saying Barclays was well funded and profi table. The UK car industry is also in trouble so on 27 January Lord Mandelson outlined a package of government support for the UK car industry potentially worth up to £2.3 billion. This package includes guarantees to unlock loans of up to £1.3 billion from the European Investment Bank and another £1 billion in loans to fund investment in green-friendly vehicles. On 19 January the UK Government announced a further package of measures to encourage increased lending by banks. Existing support to banks is to be increased and the Government stake held in RBS is to rise to around 70 per cent. In return, RBS has promised to increase its lending in 2009 by £6 billion. However, the key part of the Government package is an asset protection scheme that will allow banks to buy government insurance against additional losses for assets denominated in any currency on their books in return for a fee. The scheme is expected to last for at least fi ve years. In exchange, banks taking part in the scheme (which is voluntary) will have to sign legally binding agreements to increase lending. Northern Rock, which was nationalised last year, will also face a complete policy reversal. Now instead of having to wind down its mortgage book it will have to offer new loans in an attempt to increase capacity in the mortgage market. The Treasury has also authorised the Bank of England to buy ‘high quality’ corporate assets, initially worth up to £50 billion from 2 February. It is hoped that this will improve fi nancial stability and reduce the fi nancial constraints on large companies. The government has also announced that the credit guarantee scheme that had been due to expire in April, will now be extended to the end of the year.

London’s Economy Today | Issue 77 Today Economy London’s In response to the ongoing diffi culties faced by businesses attempting to get access to credit, the UK Government has unveiled a 3-point plan. Under one scheme, the Government will underwrite half of up to £20 billion of short-term credit providing working capital for companies with a turnover of up to £500 million. The Government also plans to guarantee up to 75 per cent of loans for businesses with a turnover of up to £25 million. However, this part of the scheme will only be targeted at particular sectors of the economy. Finally, the 4 £50 million fund announced as part of last November’s Pre-Budget Report focused on over-indebted small businesses with high growth potential is to be expanded with £25 million of fresh funding from banks. These schemes along with recent bank nationalisations, weakening tax revenues and increases in expenditure on benefi ts such as Job Seekers Allowance will worsen the Government’s already deteriorating public fi nances. Banking problems are also continuing in the rest of the world. Commerzbank, Germany’s second largest bank, announced on 8 January that the German government would inject €10 billion, taking a 25 per cent stake plus 1 share in the bank, whilst the Irish government said on 15 January that it would nationalise the Anglo Irish Bank. It was announced on 16 January that the Bank of America would receive a further $20 billion of new US government aid along with $118 billion worth of guarantees against bad assets. The US Senate has also released the remaining $350 billion of the fi rst US fi nancial bailout package. Rapid slowdown at the end of 2008 expected to continue Stock markets suffered during 2008 with the FTSE 100 ending the year over 30 per cent down, its worst annual decline since the index was created in 1985. Meanwhile sterling fell by around 25 per cent against a trade-weighted basket of currencies during 2008. With the beginning of 2009 seeing major concerns about the UK banking sector and the Government’s fi nances sterling continued to fall hitting a 24-year low against the dollar. At least this will help to support the UK’s net exports. Unemployment has risen in the UK with ILO unemployment increasing to 7.4 per cent in the three months to November 2008. Morgan McKinley, the fi nancial recruitment specialist has reported a 34 per cent drop in job vacancies in the City of London in December compared with the same period a year ago. Meanwhile the British Chambers of Commerce’s Economic Survey for Q4 2008 found that “all the critical national balances have worsened, for both manufacturing and services, and all are in negative territory”, whilst the results “highlight a frightening deterioration in the UK economic situation”. In the Eurozone economic confi dence has fallen to levels not seen since the ‘Economic Sentiment Index’ was fi rst introduced in January 1985. Spain, Portugal and Greece all fell victim to Standard and Poor’s downgrades. German manufacturing has been hit particularly hard by reduced global demand, with exports slumping by 10.6 per cent in November. Responding to the downturn and rapidly falling infl ation the European Central Bank cut interest rates by 50 basis points in January to 2 per cent – the lowest they have been since the end of 2005. Elsewhere, US unemployment hit 7.2 per cent after rising by 524,000 in December. The downturn in global demand is also having an impact on China, which experienced an annualised growth rate of just 6.8 per cent in the fi nal quarter of 2008. With the global downturn picking up speed and Mervyn King, the Governor of the Bank of England, warning that “the contraction of lending to ordinary viable businesses… is threatening to drive the economy further into recession” it is likely that the UK and London economies will experience an | Issue 77 Today Economy London’s extremely tough 2009. Economic indicators

Increase in moving average of passenger numbers The most recent 28-day period is from Passenger numbers 9 November 2008 to 6 December 2008. journeys (millions) adjusted for odd days millions 200 5 London’s Underground and buses had 268.5 180 million passenger journeys; 179.9 million by bus and 88.6 million by Underground. 160 The moving average of passengers every 140

period increased to 254.5 million from a 120

downwardly revised 254.2 million. The 100 moving average for buses was 171.0 million. 80 The moving average for the Underground was 83.6 million. 60 The methodology used to calculate the 40

number of bus passenger journeys was 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

London Underground Bus (pre 1 April '07 method) Bus (new method) changed by TfL from 1 April 2007. For a London Underground moving average Bus moving average (pre 1 April '07 method) Bus moving average (new method) detailed explanation please see LET issue 58 Source: Transport for London (June 2007). Latest release: January 2009 Next release: February 2009

Average annual growth rate of Annual % change in passengers using London Underground and buses passengers continues to decrease adjusted for odd days % 20 The moving average annual rate of growth 18 16 in passenger journeys decreased to 3.3% 14 12 from a downwardly revised 3.6% in the 10 8 previous period. 6 The moving average annual rate of 4 2 growth in bus passenger journey numbers 0 -2 decreased to 3.5% from a downwardly -4 -6 revised 3.7% in the previous period. -8 -10 The moving average annual rate of growth -12 in Underground passenger journey numbers 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 London Underground Buses decreased to 3.0% from 3.4% in the Underground plus bus London Underground moving average Buses moving average LU and buses moving average previous period. Latest release: January 2009 Source: Transport for London Next release: Februaryy 2009 % Claimant count unemployment rates Claimant count unemployment % of working age population 8 The rate of claimant count unemployment 7 (the percentage of resident working age population who are unemployed and 6 claiming Jobseekers’ Allowance) in London 5

was 3.2% in December 2008. 4 There were 160,000 unemployment 3 claimants in London in December 2008 compared with 131,100 in December 2007. 2 The claimant count unemployment rate of 1

London remains above that of the UK. 0 Latest release: January 2009

London’s Economy Today | Issue 77 Today Economy London’s Next release: February 2009 1997 Jan 1998 Jan 1999 Jan 2000 Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan London UK Source: Claimant Count, Nomis Real GVA growth in London, South East and Eastern Regions % Annual output growth eases in year-on-year change London 8 7

London’s annual growth in output 6 decreased to 1.3% in Q2 2008 from a 5 downwardly revised 2.7% in Q1 2008. 4 Annual output growth in the South East 3 decreased to 1.6% in Q2 2008 from a 2 6 1 downwardly revised 2.6% in Q1 2008. 0

Annual output growth in the Eastern -1

region decreased to 1.4% in Q2 2008 -2

from a downwardly revised 2.5% in Q1 -3

2008. -4

-5 Latest release: November 2008 1983 q1 1984 q1 1985 q1 1986 q1 1987 q1 1988 q1 1989 q1 1990 q1 1991 q1 1992 q1 1993 q1 1994 q1 1995 q1 1996 q1 1997 q1 1998 q1 1999 q1 2000 q1 2001 q1 2002 q1 2003 q1 2004 q1 2005 q1 2006 q1 2007 q1 2008 q1 Next release: February 2009 London South East Eastern Source: Experian Business Strategies

Full-time equivalent employment in London, South East and Eastern Regions Annual employment growth year-on-year growth from quarterly figures % in London faster than in 8 surrounding regions 6 London’s annual employment growth 4 increased to 1.4% in Q2 2008 from an 2

upwardly revised 1.0% in Q1 2008. 0 Annual employment growth in the South -2 East decreased to 0.9% in Q2 2008 from a downwardly revised 1.3% in Q1 2008. -4 Annual employment growth in the -6

Eastern region decreased to 0% in Q2 -8 2008 from a downwardly revised 0.5% in 1989 q1 1990 q1 1991 q1 1992 q1 1993 q1 1994 q1 1995 q1 1996 q1 1997 q1 1998 q1 1999 q1 2000 q1 2001 q1 2002 q1 2003 q1 2004 q1 2005 q1 2006 q1 2007 q1 2008 q1 Q1 2008. London South East Eastern Source: Experian Business Strategies Latest release: November 2008 Next release: February 2009

House prices, UK and London Falling house prices year-on-year growth from quarterly figures, seasonally adjusted data % Nationwide reported that house prices in 40 London fell at their fastest year-on-year 30 rate since Q1 1991 in Q4 2008.

Annual house price inﬂ ation in London was 20 –15.1% in Q4 2008, down from –9.4% in Q3 2008. 10 Annual house price inﬂ ation in the UK was 0 –14.7% in Q4 2008, down from -10.3% in

Q3 2008. -10

Latest release: January 2009 -20

Next release: April 2009 1989 q1 1989 q3 1990 q1 1990 q3 1991 q1 1991 q3 1992 q1 1992 q3 1993 q1 1993 q3 1994 q1 1994 q3 1995 q1 1995 q3 1996 q1 1996 q3 1997 q1 1997 q3 1998 q1 1998 q3 1999 q1 1999 q3 2000 q1 2000 q3 2001 q1 2001 q3 2002 q1 2002 q3 2003 q1 2003 q3 2004 q1 2004 q3 2005 q1 2005 q3 2006 q1 2006 q3 2007 q1 2007 q3 2008 q1 2008 q3 London UK Source: Nationwide

London’s Economy Today | Issue 77 Today Economy London’s Passengers London's airports % Weak airport passenger passenger numbers numbers 15,000,000 20 14,000,000 16 9.0 million passengers travelled through 13,000,000 12 7 London’s airports in December 2008. 12,000,000 8

The number of passengers using 11,000,000 4

London’s airports decreased by 6.7 per 10,000,000 0

cent from December 2007 to December 9,000,000 -4

2008. 8,000,000 -8 The year-on-year percentage change 7,000,000 Total passengers -12 in passenger numbers using London’s Annual % change in passengers 6,000,000 -16 airports was negative for most of 2008. 5,000,000 -20

Latest release: January 2009 1998 Jan 1999 Jan 2000 Jan 2001 Jan 2002 Jan 2003 Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 1998 Apr 1999 Apr 2000 Apr 2001 Apr 2002 Apr 2003 Apr 2004 Apr 2005 Apr 2006 Apr 2007 Apr 2008 Apr 1998 Oct 1999 Oct 2000 Oct 2001 Oct 2002 Oct 2003 Oct 2004 Oct 2005 Oct 2006 Oct 2007 Oct 2008 Oct 1998 July 1999 July 2000 July 2001 July 2002 July 2003 July 2004 July 2005 July 2006 July 2007 July 2008 July Next release: February 2009 Source: Civil Aviation Authority

Greater London Retail Traffic Index 2009 compared Synovate Retail Trafﬁ c was with 2008, 2007, 2006 and 2005 Index extremely weak for much of 160

2008 150 The Synovate Retail Trafﬁ c Index of 140 shoppers in London was 94.9 in the 130

second week of January compared to 120

102.2 in the previous week. 110

Compared to previous years the index 100 was extremely weak between mid- 90 September and the third week of 80 December 2008. However, since then 70 the index has been above or similar to Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec previous years. 2005 2006 2007 2008 2009 Synovate’s Retail Trafﬁ c Index measures Source: Synovate the number of shoppers and does not necessarily reﬂ ect the level of spending.

Latest release: Mid-January 2009 Next release: Weekly

Business activity in London index London’s business activity seasonally adjusted index (50 indicates no change on previous month) decreasing 70

London ﬁ rms decreased their output of 65 goods and services in December 2008. The Purchasing Managers’ Index (PMI) 60

of business activity recorded 42.7 in 55 December compared to 41.7 in November. A rate of below 50 on the index indicates 50 a decrease in business activity from the previous month. 45

Latest release: January 2009 40 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 May-97 May-98 May-99 May-00 May-01 May-02 May-03 May-04 May-05 May-06 May-07 May-08 Next release: February 2009 | Issue 77 Today Economy London’s

London Source: RBS/Markit Economics Level of employment in London index London’s employment has poor seasonally adjusted index (50 indicates no change on previous month) 65 December The PMI shows that the level of 60

employment in London ﬁ rms decreased 55 in December 2008. 8 The PMI for the level of employment was 50 39.7 in December compared to 44.7 in November. 45 A rate of below 50 on the index indicates 40 a decrease in the level of employment

from the previous month. 35 Jan-07 Jan-08 Jan-05 Jan-06 Jan-02 Jan-03 Jan-04 Jan-00 Jan-01 Jan-98 Jan-99 Jan-97 Sep-08 Sep-06 Sep-07 Sep-03 Sep-04 Sep-05 Sep-01 Sep-02 Sep-99 Sep-00 Sep-97 Sep-98 May-07 May-08 May-05 May-06 May-03 May-04 May-01 May-02 May-99 May-00 Latest release: January 2009 May-97 May-98 Next release: February 2009 London Source: RBS/Markit Economics

New orders in London index New orders in London drop seasonally adjusted index (50 indicates no change on previous month) 70 December 2008 saw a fall in new orders for London ﬁ rms. 65

The PMI for new orders recorded 39.9 60 in December compared to 41.5 in November. 55

A rate of below 50 on the index indicates 50 a decrease in new orders from the previous month. 45

40 Latest release: January 2009

Next release: February 2009 35 Jan-08 Jan-07 Jan-06 Jan-05 Jan-04 Jan-03 Jan-02 Jan-01 Jan-00 Jan-99 Jan-98 Jan-97 Sep-08 Sep-07 Sep-06 Sep-05 Sep-04 Sep-03 Sep-02 Sep-01 Sep-00 Sep-99 Sep-98 Sep-97 May-08 May-07 May-06 May-05 May-04 May-03 May-02 May-01 May-00 May-99 May-98 May-97

London Source: RBS/Markit Economics

RICS housing market survey Surveyors expect house prices to house price expectations; net balance in London, and in England and Wales; seasonally adjusted data continue falling 100 The RICS survey shows that surveyors 80 expect house prices to continue to 60 decrease over the next three months in 40 London and in England and Wales. 20 The net house price expectations balance 0

in London was -90 in December 2008, -20

down from -72 in November. -40

For England and Wales, the net house -60

price expectations balance was –79 -80 London net balance England and Wales net balance

in December 2008, down from –65 in -100

November. Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jan-08 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Source: Royal Institution of Chartered Surveyors Latest release: January 2009 Next release: February 2009

London’s Economy Today | Issue 77 Today Economy London’s Business births and closures

By Matthew Waite, In November 2008 the Ofﬁ ce for National Statistics Senior Economist (ONS) produced new statistics on business births and deaths. These new statistics replace the existing 9 BERR statistics published in “Business start ups and closures: VAT registrations and deregistrations in the UK”, for which 2008 will be the last publication date. The new statistics are produced under the guidance and methodology of Eurostat and aim to ensure comparability of business demography statistics across Europe. This supplement presents the latest data for both the ONS and BERR statistics, summarises the main differences between the two and sets out the impact of the change for London.

The main difference between the ONS and BERR statistics concerns coverage. Whilst the BERR statistics include only those businesses that are above the threshold for VAT payments, the ONS statistics also include PAYE registered businesses. This means that for the ﬁ rst time, businesses that do not pay VAT are included in the measures for business demography. Figure 3 shows the number of business births and deaths for the UK, using both BERR and ONS data. The inclusion of PAYE-registered businesses ensures a more comprehensive approach to business demography. As a result, births and deaths as measured by the ONS are consistently higher than the corresponding BERR statistics.

Figure 3: Numbers of 350.0 business births and deaths for the UK 300.0 (2000-2007) 250.0 Source: ONS 200.0

150.0 Thousands 100.0

50.0

0.0 2000 2001 2002 2003 2004 2005 2006 2007 BERR Start-ups ONS Business Demography Births BERR Closures ONS Business Demography Deaths

London’s Economy Today | Issue 77 Today Economy London’s Figure 4: Business birth and death rates for the 14.0 UK (2000-2007) 12.0 Source: ONS 10.0 8.0 6.0 Percent 10 4.0 2.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007

BERR Start-up rate ONS Birth rate BERR Closure rate ONS Death rate

Figure 4 shows the business birth and death rates using both BERR and ONS data for the UK as a whole. The chart shows that over time birth and death rates are higher when using the ONS methodology as compared to the BERR methodology. This gap between the two is due primarily to the inclusion of PAYE registered businesses but may also be due, in part, to changes in the measurement of the stock of businesses. In order to measure the stock of businesses, the BERR statistics look at a snapshot of the business stock at a specifi c point in time. The new ONS series additionally accounts for any business activity taking place at any point in time within a year. Other differences between the two series relate to the legal status of businesses included, the industries included, as well as on adjustments and revisions. More detail on the specifi c differences can be found at: http:// stats.berr.gov.uk/ed/vat/ED_AU_Article_for_Economic_and_Labour_Market_ Review_Final_Version.pdf Regional data from the new ONS statistics are available for 2007 only. These data show that, of all UK regions, London benefi ts the most from the change in the methodology of estimating business demography. Data for 2007 show that the ONS methodology captures around 67,000 additional businesses for London as compared to the BERR approach and, as a result, London accounts for a 1 percentage point higher share of all UK businesses when compared to the BERR statistics. For 2007, the ONS estimates the business birth rate for London at 16.5 per cent and the business death rate at 11.8 per cent. For the same year BERR estimates the business start up rate for London at 12.8 per cent and the business closure rate at 8.6 per cent. For more information on the new series see the ONS website: http://stats.berr. gov.uk/UKSA/ed/sa20081128.htm

London’s Economy Today | Issue 77 Today Economy London’s Additional information

Data sources Tube and bus ridership Transport for London on 020 7222 5600 11 or email: enquire@tﬂ .gov.uk GDP/GVA growth Experian Business Strategies on 020 7630 5959 Tourism – overseas visitors www.statistics.gov.uk Tourism – domestic visitors www.visitlondon.com London airports www.caa.co.uk Business activity www.rbs.co.uk/pmireports Unemployment rates www.statistics.gov.uk Glossary Civilian workforce jobs Measures jobs at the workplace rather than where workers live. This indicator captures total employment in the London economy, including commuters. Claimant count rate Unemployment rate based on the number of people claiming unemployment beneﬁ ts. Employee jobs Civilian jobs, including employees paid by employers running a PAYE scheme. Government employees and people on training schemes are included if they have a contract of employment. Armed forces are excluded. Gross domestic product (GDP) A measure of the total economic activity in the economy. Gross value added (GVA) Used in the estimation of GDP. The link between GVA and GDP is that GVA plus taxes on products minus subsidies on products is equal to GDP. ILO unemployment rate The International Labour Organisation’s calculation of the number of people out of work. Tube ridership Transport for London’s measure of the number of passengers using London Underground in a given period. There are 13 periods in a year. In 2008/09 there are eleven 28-day periods, one 26-day period and one 31-day period. Period 1 started on 1 April. Bus ridership Transport for London’s measure of the number of passengers using buses in London in a given period. There are 13 periods in a year. In 2008/09 there are eleven 28-day periods, one 26-day period and one 31-day period. Period 1 started on 1 April.

London’s Economy Today | Issue 77 Today Economy London’s Acronyms ABI Annual Business Inquiry GVA Gross value added BAA British Airports Authority ILO International Labour Organisation BCC British Chamber of Commerce IMF International Monetary Fund BITOA British Incoming Tour Operators Association LCCI London Chamber of Commerce and Industry 12 CAA Civil Aviation Authority LET London’s Economy Today CBI Confederation of British Industry MPC Monetary Policy Committee DCLG Department for Communities and ONS Ofﬁ ce for National Statistics Local Government PMI Purchasing Managers’ Index EBS Experian Business Strategies PWC PricewaterhouseCoopers GDP Gross domestic product RICS Royal Institution of Chartered Surveyors

Past features Issue 53 London Economic Development Snapshot London’s employee jobs - the latest trends 54 Crossrail: Where is it going? 55 How large is wage inequality in London? Budget 2007: The implications for London 56 The McKinsey Report and its relevance to London’s ﬁ nancial services sector 57 Focus on key London employment sectors 58 Increasing London’s housing supply 59 London Economic Development Snapshot 60 Creative London - London’s Creative Sector: 2007 Update 61 The value of London’s key exports 62 Globalisation, skills and employment: The London story 63 Working hard or hardly working? How cities could work better. GLA Economics’ international conference reviewed 64 London’s Central Business District: Its global importance 65 London Economic Development Snapshot 66 Women, employment and the gender pay gap 67 Budget 2008: A summary 68 Employment in London by ﬁ rm size 69 Credit crunch and the property market 70 The evolution of UK and London employment rates 71 Self-directed adult social care in London 72 Snapshot mid-year update 73 Filling the coffers: London’s tax export 74 The LDA’s London Annual Business Survey (LABS) 75 Pre-Budget report 2008 76 Capacity takes centre stage in Transport for London’s latest business plan

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