London population drops for the first time in 30 years

UK capital suffers from a retreat driven by the pandemic

A man walks along the Thames embankment in London. England's six-week lockdown, which began at midnight on January 6, emulates the first national coronavirus shutdown from March to June – but goes further than another imposed in November when schools remained open. AFP / Tolga Akmen

London’s population is expected to decline for the first time in decades as the coronavirus pandemic drives a retreat from the city.

Accounting firm PwC found the number of people living in the capital could plunge by more than 300,000 this year, taking the population from a record 9 million to 8.7 million.

The decline is fuelled by citizens moving to rural areas as lockdowns confine people to their homes, forecasters said.

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Other factors include a decline in graduates moving to London deterred by working from home, and lower immigration because of the pandemic and Brexit, which put an end to freedom of movement.

Net migration from the EU could turn negative this year, meaning more people could leave the UK for the EU for the first time since the 1990s. Britain will also experience a “baby bust” this year as the annual birth rate dips to its lowest level in a century, the PwC report said.

Hanny Audino, economist at PwC, said that the birth rate would only increase when the labour market fully recovered. "A longer recovery will reduce peoples' expectations of their lifetime income, which could result in people deciding to have fewer children," she said.

“The effects of lower births won’t be felt for decades, but if the pandemic causes a permanent decline in births, the long-term challenges associated with the UK’s ageing population, such as greater pressure on public services and lower economic growth, could be brought forward.”

The report painted a varying picture for the return of the UK’s pre-pandemic economic performance. The economy could grow by 4.8 per cent this year in a “quick recovery scenario”, recovering losses sustained during the pandemic by December.

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A pedestrian shelters from the rain as they walk across an almost deserted Piccadilly Circus in London as Britain enters a national lockdown. AFP

However, a “slow recovery” scenario would mean gross domestic product would grow by only 2.2 per cent, taking until mid-2023 for the economy to return to its pre-pandemic health.

PwC economist Barret Kupelian said the global recovery would be uneven between countries and depended on the speedy distribution of Covid-19 vaccines.

He said: “The Chinese economy is already bigger than its pre-pandemic size, but other advanced economies – particularly heavily service-based economies like the UK, France and Spain or those focused on exporting capital goods, such as Germany and Japan – are unlikely to recover to their pre-crisis levels by the end of 2021.”