A new report from PricewaterhouseCoopers predicts that London is to become a more important city economy over the next decade, boosted by its strong financial sector.
In its latest UK Economic Outlook study, PwC found that in 2005 London was the sixth largest city economy in the world in terms of purchasing power, behind Tokyo, New York, Los Angeles, Chicago and Paris.
However, its strong business and financial services are likely to see it jump ahead of Chicago and Paris to fourth position by 2020, spelling good news for financial executives and others working in the city.
GDP growth set to moderate
The report also found that UK GDP growth is set to moderate slightly from three per cent in the year to the fourth quarter of 2006 to around 2.75 per cent in 2007 and 2.5 per cent in 2008.
Business investment growth is expected to stay strong this year, but could moderate somewhat in 2008.
Consumer spending growth is expected to remain slightly below trend at around 2.5 per cent in 2007 and 2.25 per cent next year.
Interest rates are expected to rise to 5.5 per cent in the short-term and then remain at that level in PwC's main scenario.
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