Economy of London

London, the capital city of the United Kingdom, is the world’s leading financial centre for international business and commerce and is one of the „command centres” for the global economy.

The economy of London is dominated by service industries, particularly financial services and associated professional services, which have strong links with the economy in other parts of the United Kingdom and internationally. According to the Brookings Institution, in 2011 London had the fifth largest metropolitan economy in the world.^[5] By way of comparison, London’s economy is roughly the same size as that of Sweden or Iran.

With an estimated 8,615,246 residents in 2015, London is the most populous region, urban zone and metropolitan area in the United Kingdom. London generates approximately 22 per cent of the UK’s GDP. 841,000 private sector businesses were based in London at the start of 2013, more than in any other region or country in the UK. 18 per cent are in the professional, scientific and technical activities sector while 15 per cent are in the construction sector. Many of these are small and medium-sized enterprises

Business districts

London has five major business districts: the City, Westminster, Canary Wharf, Camden & Islington and Lambeth & Southwark. One way to get an idea of their relative importance is to look at relative amounts of office space: Greater London had 26,721,000 m² of office space in 2001.

Financial services

London’s largest industry remains finance, it is the largest financial exporter in the world which makes a significant contribution to the UK’s balance of payments. In the 2017 Global Financial Centres Index, London was ranked as having the most competitive financial center in the world, alongside cities such as New York City, Singapore, Hong Kong, Tokyo, San Francisco, Chicago, Sydney, Boston, and Toronto. The City of London is home to exchanges, banks, brokers, investment managers, pension funds, hedge funds,^[36] private equity firms, insurance companies and reinsurance markets. London is notable as a centre of international finance where foreign participants in financial markets come to deal with one another.^[] It is also home to the Bank of England, the second oldest central bank in the world, and the European Banking Authority, although the latter is expected to move following the Brexit referendum of 2016. Other key institutions are Lloyd’s of London for insurance, the Baltic Exchange for shipping.

A second financial district has developed at Canary Wharf to the east of the City, which includes the global headquarters of two of the world’s largest banks, HSBC and Barclays, the rest-of-the-world headquarters of Citigroup and the headquarters of the global news service Reuters. London handled 36.7% of global currency transactions in 2009 – an average daily turnover of US$1.85 trillion – with more US dollars traded in London than New York, and more Euros traded than in every other city in Europe combined.London is the leading centre for international bank lending, derivatives markets, money markets,^[44] international insurance, trading in gold, silver and base metals through the London bullion market and London Metal Exchange,^[46] and issuance of international debt securities.

 

Financial services in London benefited from the UK’s membership of the European Union, although this may end following the decision of the United Kingdom to leave the European Union.The position of London as a financial centre may be further enhanced by the EU-US Free Trade Agreement currently under negotiation or a free trade agreement between the UK and the USA.

The combination of lax regulation and London’s financial institutions providing sophisticated methods to launder proceeds from criminal activity around the world, including those from drug trade, makes the City a global hub for illicit finance and London a safe haven for the world′s malfeasants, according to research papers and reports published in the mid-2010s.

 

„Even if the situation or the challenge is very complex,usually the simplest solution is the one to go with.”

-Roxanne Quimby

 

Here’s Why Bitcoin Won’t Replace Gold So Easily

My presentation focused on the future of mining—not just of gold and precious metals but also cryptocurrencies.

Believe it or not, there are upwards of 2,100 digital currencies being traded in the world right now, with a combined market cap of nearly $150 billion.

Obviously not all of these cryptos will survive. We’re still in the early innings. Last month I compared this exciting new digital world to the earliest days of the dotcom era,and just as there were winners and losers then, so too will there be winners and losers today. Although bitcoin and Ethereum appear to be the frontrunners right now, recall that only 20 years ago AOL and Yahoo! were poised to dominate the internet. How times have changed!

Will Bitcoin Replace Gold?

 

Lately I’ve been seeing more and more headlines asking whether cryptos are “killing” gold. Would the gold price be higher today if massive amounts of money weren’t flowing into bitcoin? Both assets, after all, are sometimes favored as safe havens. They’re decentralized and accepted all over the world, 24 hours a day. Transactions are anonymous. Supply is limited.

 

But I don’t think for a second that cryptocurrencies will ever replace gold, for a number of reasons. For one, cryptos are strictly forms of currency, whereas gold has many other time-tested applications, from jewelry to dentistry to electronics.

Unlike cryptos, gold doesn’t require electricity to trade. This makes it especially useful in situations such as hurricane-ravished Puerto Rico, where 95 percent of people are reportedly still without power. Right now the island’s economy is cash-only. If you have gold jewelry or coins, they can be converted into cash—all without electricity or WiFi.

Finally, gold remains one of the most liquid assets, traded daily in well-established exchanges all around the globe. Every day, some £13.8 billion, or $18 billion, worth of physical gold are traded in London alone, according to the London Bullion Market Association (LBMA). The cryptocurrency market, although expanding rapidly, is not quite there yet.

I will admit, though, that bitcoin is energizing some investors, especially millennials, in ways that gold might have a hard time doing. The proof is all over the internet. You can find a number of TED Talks on bitcoin, cryptocurrencies and the blockchain, but to my knowledge, none is available on gold investing. YouTube is likewise bursting at the seams with videos on cryptos.

Bitcoin is up 350 percent for the year, Ethereum an unbelievable 3,600 percent. Gold, meanwhile, is up around 10 percent. Producers, as measured by the NYSE Arca Gold Miners Index, have gained 11.5 percent in 2017, 23 percent since its 52-week low in December 2016.

Look Past the Negativity to Find the Good News

The news is filled with negative headlines, and sometimes it’s challenging to stay positive. Take Friday’s jobs report. It showed that the U.S. lost 33,000 jobs in September, the first month in seven years that this happened. A weak report was expected because of Hurricane Irma, but no one could have guessed the losses would be this deep.

The jobs report wasn’t all bad news, however. For one, the decline is very likely temporary. Beyond that, a record 4.88 million Americans who were previously sitting out of the labor force found work last month. This helped the unemployment rate fall to 4.2 percent, a 16-year low.

 

There’s more that supports a stronger U.S. economy. As I shared with you last week, the Manufacturing ISM Purchasing Managers’ Index (PMI) rose to a 13-year high in September, indicating rapid expansion in the manufacturing industry. Factory orders were up during the month. Auto sales were up. Oil has stayed in the relatively low $50-a-barrel range, which is good for transportation and industrials, especially airlines. Small-cap stocks, as measured by the Russell 2000 Index, continue to climb above their 50-day and 200-day moving averages as excitement over tax reform intensifies.

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