According to new forecasts from consultancy EY, London is set to drive the UK economy out of recession and emerge as the fastest-growing region in the country in the coming years.

The report predicts that London's economy will expand by 2.6% per year between 2024 and 2026, surpassing the growth of any other region.

The strong performance of London's financial and legal sectors will drive its economic growth, making it a leader in the country. Although London's GDP is expected to shrink by 0.2% this year, the lowest of any region, it is forecasted to exceed the UK's average annual growth rate of 2.1% between 2024 and 2026.

However, high street retailers are likely to be hit hard by the spending slowdown, with the sector expected to shrink by 3.3% this year. Pubs, bars, and restaurants are also expected to suffer, with a projected contraction of 2.7%, while arts and entertainment providers are set to shrink by 1.8%.

Inflation has reached a 40-year high but has decreased for three consecutive months, falling from its peak of 11.1% to 10.1%. Despite the expected drop in the rate of price increases this year, household real incomes have been severely impacted, leading to a decrease in spending.

Overall, London's economy is expected to be a key driver of the UK's economic recovery in the coming years, with its financial and legal sectors leading the way. However, some sectors are likely to experience difficulties, and the impact of inflation on household incomes is likely to lead to a reduction in spending. Photo by Philippe Salgarolo, Wikimedia commons.