Good growth in London

London is the UK’s economic powerhouse, generating over 20% of national output and a large share of services exports. It continues, however, to face a complex set of pressures. Growth remains uneven. Affordability and infrastructure pressures persist. The city continues to attract international talent and investment but is also competing with global peers to retain skilled workers and secure capital. At the same time, productivity challenges, the advance of AI, and shifting global conditions are reshaping what success looks like.

When compared to international peers, London performs well on GDP per capita and air quality but fares worse in other critical areas such as average one-way daily commute times, unemployment rates and health outcomes. The contrasting success among some of its peer cities reflects long-standing policy choices, alongside inconsistent funding and governance structures. Singapore, for example, has developed accessible infrastructure through integrated planning. Sydney links housing and jobs to transit through corridor-based development. Paris has expanded its metro system and invested in housing renewal. Berlin has prioritised vocational training to support productivity and inclusion. In New York, targeted tax credits and health investment have improved outcomes for its residents.

These examples show that policy matters and for London to close its performance gaps, it must pair strategic ambition with the kind of long-term coordination and delivery seen in its global competitors. And in some areas, while the UK Government may need to heighten their focus, complementing this with greater levels of devolution may be needed.

Planning for more balanced growth

The London Growth Plan sets out a 10-year strategy to address these pressures. It focuses on raising productivity, lifting incomes for low earners, accelerating the net zero transition, and strengthening London’s global role.

A central feature is the focus on spreading investment more evenly across the city, particularly in outer boroughs, high streets, and innovation corridors. Delivery is backed by changes to HM Treasury’s Green Book, which now allows investment cases to reflect social and environmental outcomes. This strengthens the case for funding in areas previously overlooked, although this may also result in increased competition across the UK for funding allocations.

Linking sector growth to broader outcomes

London continues to lead globally in finance, digital technology and the creative economy. These sectors remain key to its competitiveness, supported by strong institutions and deep talent pools. The UK Industrial Strategy and the London Growth Plan highlight other high-potential sectors, including life sciences, green industries and advanced digital services.

While Greater London remains one of the most attractive regions in Europe for foreign investment, in sectors such as life sciences and green tech, competition is intensifying as other global cities move quickly to expand capacity and workforce pipelines. The London Growth Plan provides a clear direction, but turning this into sectoral advantage will require focused investment in skills, commercial space and infrastructure across more parts of the city.

Strengthening governance and capacity

Effective delivery will depend on stronger coordination between tiers of government. The London Growth Plan has been developed jointly by the Mayor of London and London Councils, reflecting recognition of the need for a shared approach. Boroughs support the plan’s strategic goals, but they are also seeking a greater role in implementation. More formal shared decision-making through bodies such as the new Growth Mission Board ensure accountability, fairness and better outcomes for Londoners.

At the same time, many boroughs face acute financial and capacity pressures. Boroughs’ ability to plan for and deliver growth varies widely, with resource constraints limiting their capacity to shape housing and infrastructure at pace. Without sufficient funding there is a risk that delivery of the London Growth Plan will be fragmented and slower than intended.

In addition, the lesson from London’s international peers is that governance matters. Berlin uses a networked approach to align city and local government. New York’s centralised system supports faster decisions but limits local input. Paris operates through the Métropole du Grand Paris, although complexity can delay action. Sydney coordinates state and local planning, though decision-making can be slow. To translate strategic ambition into visible progress, London needs to continue to build institutional capacity and shared accountability.

Looking ahead

London’s challenges are significant, but the London Growth Plan offers a clearer course than past strategies. Its focus on inclusion, resilience and place-based investment reflects a more balanced model of growth. The real test is whether strategy can now translate into visible improvements in affordability, opportunity and mobility across all parts of the city. In a more competitive global landscape, London’s success will depend not only on scale but on its ability to deliver fairer, more sustainable growth.