Economy of London

London is at the heart of Britain’s economy.

More than one-third of Britain’s population and economic activity is concentrated in southeastern England, in and around London.

The annual size of London’s economy, estimated in 1997 to be about $122 billion, is comparable to the economies of industrialized nations.

More than a hundred of the world’s major companies have their headquarters in London.

What Londoners do for a living has changed considerably since the city was a commercial and industrial center in the 19th century.

Manufacturing has steadily declined and today accounts for only 10 percent of total employment.

The printing and publishing industry is now a leading employer. Also important are electrical and electronic engineering; food, drink, and tobacco; and chemicals and synthetic fibers.

Far more important is the services sector, which employs 85 percent of London’s workforce.

This is led by financial and business services concentrated in the City and, to a lesser extent, in the rejuvenated Docklands business district.

London is a major global financial center, rivaled only by Tokyo and New York.

It leads other cities in the number of international banks, the amount of foreign lending, the activity of the foreign exchange market, and the size of its international insurance business.

Many banks are clustered around the Bank of England, insurance companies around Lloyd’s of London, and stockbrokers around the London Stock Exchange.

British companies traditionally focused their services on only one of these activities. However, with the deregulation of the London Stock Exchange in 1986, known as the Big Bang, many large integrated merchant banking and securities companies arrived from abroad to offer a variety of financial services.

In response, London merchant banks, such as Warburg’s, joined with stockbrokers and foreign banks in new “financial supermarkets” that are able to provide a range of services to customers under one roof.

Tourism is another important part of the services sector. London attracts more than 24 million visitors annually, more than half of them from outside the country. Serving tourists is thought to employ at least 300,000 Londoners.

London is the hub of the national transport system of arterial roads, motorways, railway lines, and air connections.

Port facilities left the traditional Docklands area starting in the late 1960s for newer accommodations that spread out along the Thames all the way to the river’s estuary on the North Sea, in what is known as the East Thames Corridor.

The new Port of London, the largest port in Britain, has 84 independently operated wharves and terminals that handle more than 50 million tons of imports and exports annually.

Four airports serve the city: Heathrow, one of the world’s busiest international airports, to the west; Gatwick to the south; Stansted to the northeast; and City Airport, to the east, for business travelers to continental Europe.

London’s internal transportation system is one of the most extensive in the world.

According to London Transport, the public body that operates the transit system, in 1995 and 1996 almost a million people traveled into central London each weekday morning, 83 percent of them by public transport.

Of these commuters by public transport, 40 percent traveled by British Rail, the rest on London Transport’s network of buses and underground trains.