Business News
London now less expensive to live in
Surprisingly, the capital city has fallen down a league table of the world's most expensive cities, sliding from second to 22nd place. The slide in the pound from the dizzy heights of $2.11 in November 2007 to $1.41 in January this year has triggered a sudden drop in the price of living in London, according to research by UBS, the investment bank. The study found Oslo is now the world's most expensive city, followed by Zurich, Copenhagen, Geneva, Tokyo and New York.
If the rise in the value of sterling were to go on to reach $1.70, London would move back up the rankings to become the fifth most expensive city. Other significant fallers include Moscow, Mexico City and Seoul, where the cost of living was also affected by currency devaluations and, in the case of the Russian capital, falling oil prices.
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London still top destination for foreign direct investment
Britain remained Europe's top destination country for foreign direct investment in 2008 in terms of the number of projects and jobs created, according Ernst & Young's "European Attractiveness Survey 2009" (which incorporates data from their annual "European Investment Monitor"). Although projects fell four per cent and jobs created were 16 per cent down on 2007, the UK attracted 686 investment projects in 2008, creating 20,000 jobs.
Europe's inward investment market remains mostly fuelled by European (51 per cent - German, British and French mostly) and US investors (25 per cent). The largest investor in the UK remained the US (263 projects), followed by India (49), France (46), Germany (42) and Japan (30). Indian investment surged ahead of traditional investors, France and Germany, for only the second time in the last 12 years.
London retained its position as the most attractive city for inward investment in Europe in 2008 for the seventh year in a row, securing 262 projects. However, London was not immune to the grip of the downturn, with a 14 per cent decline compared to 2007, halting a four year growth spurt. In comparison to its closest European city rivals, the capital received a relatively high number of projects, with Paris coming in second with 222 projects and Madrid third on 80.
The UK received 18 per cent of Europe's FDI in 2008, followed by France with 14 per cent, Germany with 10 per cent and Spain with 6 per cent - the same ranking as in 2007. It got 14 per cent of the 148,333 new jobs, followed by Poland with 10 per cent and France and Russia with 9 per cent each.
Some sectors are weathering the recession better than others. Achieving our ambitions, one of the biggest winners due to new green market opportunities, was renewable industries, with almost 6,000 new FDI jobs in 2008. Machinery and equipment saw a 19 per cent increase in FDI projects, due to a surge of projects to supply wind turbines, solar components and fuel cells. IT outsourcing, financial and business services were early victims of the downturn as their clients struggled, especially in the UK, France and Spain. New jobs from these sectors and countries slumped by 33 per cent in 2008.
In total some 3,718 new investments were announced in Europe in 2008, just six up from 2007, and Ernst & Young said this was likely to fall sharply this year as firms became more cautious in the face of a sharp recession across most of the continent.
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