London economy suffering "wobble" over Brexit worries: think tank

[LONDON] London's economy is wobbling from the early effects of Brexit judging from the capital's faltering housing market, fewer European Union citizens seeking work and weaker job creation, according to a report from the Centre for London think tank.

Despite the unemployment rate holding at its lowest in more than 25 years at 5.5 per cent, job creation has slowed and the number of foreign workers seeking payroll tax registrations has dropped by 15 per cent compared with a year earlier.

"While no-one knows how Brexit will play out, this new analysis suggests that London's economy is beginning to wobble," think tank director Ben Rogers said on Tuesday.

Britain's economy performed much better last year than most economists expected in the months after the vote to leave the European Union. But since the start of this year, there have been signs of slowing consumer spending and increased reluctance among businesses to invest.

Demand for luxury housing in central London has fallen sharply, and the Centre for London said that the overall annual rate of house price growth was less than 3 per cent, the weakest since 2012 when the city was still recovering from the 2012 financial crisis.

"London has shown remarkable resilience in the years following the recession. But its growth has not been painless. Levels of inequality have soared. Congestion, pollution and the housing shortage have all worsened," Mr Rogers said.

The report was sponsored by Australian property and construction company Lendlease, which is involved in a number of projects in London and elsewhere in Britain.

REUTERS