Actual wages in London have slumped by 5.6 per cent since 2008, as soon as inflation is accounted for, based on the newest figures for 2023. Solely Nottingham has suffered a much bigger drop in earnings, at 8.6 per cent over the identical interval.
Regardless of London producing over a fifth of Britain’s financial progress, analysts worry the capital’s wage woes may deter expert employees. Paul Swinney of the Centre for Cities suppose tank warned that top earners have borne the brunt for the reason that monetary crash, resulting in stagnant productiveness in sectors akin to banking, life sciences and tech.
Though the minimal wage has boosted pay for decrease earners in different components of the nation, London’s flatlining productiveness seems to have stifled wage progress. Mr Swinney stated, “It is the million dollar question. We’ve had a huge boom in jobs but productivity has totally stopped growing.”
He additionally cautioned that worsening housing prices, coupled with lagging salaries, could push high expertise in direction of rival cities akin to New York or Paris. “London hasn’t done very well on the wage side. The cost of living has got worse, so it really squeezes those benefits of being in London,” he stated.
The capital’s hunch comes as Metropolis establishments proceed to fret about transatlantic pay disparities: final 12 months, David Schwimmer, chief govt of the London Inventory Change Group, urged FTSE 100 firms to supply increased remuneration to draw senior executives amid intensifying world competitors.
With Rachel Reeves and Sir Keir Starmer pledging to bolster the UK economic system, Mr Swinney emphasised that reigniting productiveness in London—alongside different areas—is essential. He famous that whereas wages in cities like Newcastle and Liverpool additionally sit under 2008 ranges, Glasgow’s earnings have grown by 9.1 per cent, indicating that restoration in some areas is feasible if productiveness could be restored.
