London Daily

Focus on the big picture.
Thursday, Dec 25, 2025

London risks losing its aura as a 'fun' place to work, economist fears

London risks losing its aura as a 'fun' place to work, economist fears

Capital could lose £178m in 2021 as companies decline to send all workers back to offices
Major cities such as London face more economic pain as some companies resist the government’s efforts to encourage workers back to their desks this week, economists have warned.

Pablo Shah, a senior economist at the Centre for Economics and Business Research (CEBR), fears that the capital could have lost its aura as a “fun” place to work, particularly in the digital and creative industries.

“We had a management meeting in the office last Tuesday and were able to see what London looks like as the lockdown eases. To be frank, it looked like a ghost town,” Shah said. “London last week did not look very attractive to the talent it needs.”

That could mean more woes for the troubled hospitality sector, just as the government launches its “eat out to help out” discount meal scheme on Monday in an attempt to kickstart the economy out of the deepest slump in centuries.

Since Saturday, employers in England have been allowed to judge whether staff can safely return to offices. But many, including banks, legal firms and tech companies, are taking a cautious approach and are not rushing employees back to their desks – potentially for many weeks or months.

Many of CEBR’s own clients, such as finance firms and insurers, are not going back to offices until next year. It predicts that in 2021, the “new normal” will be 30% of London-based employees still working at home on any one day.

That would equate to £178m of lost spending on lunch, after-work drinks, coffee/tea, snacks, stationery and other office equipment each month, compared with before the coronavirus crisis, the CEBR has calculated.

However, London could suffer a sharper fall in economic activity, if it cannot recover its lustre.

“If business is scared off by this, if the potential labour force either doesn’t come or goes home, if people don’t think London is where they want to live and hence fail to attract new businesses, the effect on London’s GDP could be a huge multiple of this,” Shah said.

About £2.3bn of spending in shops, pubs and eateries near London employment hubs was lost or displaced between March and June, the CEBR said, with the city lagging behind other regions for the number of people returning to workplaces.

Other cities are also likely to struggle as major companies stick with homeworking.

Google and NatWest Group are allowing employees to work from home until 2021, even though they now have more discretion to allow them back to the office.

Many staff at Lloyds Banking Group, HSBC and Barclays are also expected to work from home until at least September, while the energy operators SSE and National Grid will review their working arrangements next month.

The slump in consumer spending has already forced several retailers into administration, including Monsoon and Quiz. Many other chains have missed rental payments as they struggle to keep afloat. Even the technology giant Apple has asked its landlords for a rent cut, according to the Sunday Times, despite reporting record sales in the last quarter.

More than 72,000 establishments have signed up for the eat out to help out offer in an attempt to lure customers through their doors. More are joining daily, the government says.

The scheme, which is set to cost taxpayers about £500m, aims to help the country’s devastated hospitality industry, which employs 1.8 million workers, get back on its feet. Anyone visiting a participating restaurant, cafe or pub on Mondays, Tuesdays and Wednesdays throughout August will receive the half-price discount of up to £10 per person.

Restaurants have had to register with the scheme. A webpage on www.gov.uk lets consumers search for participating restaurants within five miles of their home.

They range from independent establishments, such as the Ivy in London’s theatreland, to garden centres and even cafes at English Heritage sites – as well the big national chains such as Pizza Express, Costa, McDonald’s and Nando’s.

Customers are not required to download a voucher, as the discount is applied when the bill is presented and claimed back by the restaurant. The discount does not apply to takeaways, alcoholic drinks or the meal’s service charge. It is capped at £10 a person – so if two people spend £50 on food they will only get £20 knocked off the bill.

If they can stomach it, users can eat as many times as they like, breakfast, lunch and dinner, three days a week.

Pubs and restaurants in suburban and rural areas – those with outside space – look set to be very busy.

More than 40 Michelin-starred restaurants are taking part in the discount scheme. Some popular outlets have reported being inundated with people seeking reservations.

However, it remains to be seen how many inner city eateries that usually serve office workers will decide it is even worth opening up.
Newsletter

Related Articles

0:00
0:00
Close
UK Mortgage Rates Edge Lower as Bank of England Base Rate Cut Filters Through Lending Market
U.S. Supermarket Gives Customers Free Groceries for Christmas After Computer Glitch
Air India ‘Finds’ a Plane That Vanished 13 Years Ago
Caviar and Foie Gras? China Is Becoming a Luxury Food Powerhouse
Hong Kong Climbs to Second Globally in 2025 Tourism Rankings Behind Bangkok
From Sunniest Year on Record to Terror Plots and Sports Triumphs: The UK’s Defining Stories of 2025
Greta Thunberg Released on Bail After Arrest at London Pro-Palestinian Demonstration
Banksy Unveils New Winter Mural in London Amid Festive Season Excitement
UK Households Face Rising Financial Strain as Tax Increases Bite and Growth Loses Momentum
UK Government Approves Universal Studios Theme Park in Bedford Poised to Rival Disneyland Paris
UK Gambling Shares Slide as Traders Respond to Steep Tax Rises and Sector Uncertainty
Starmer and Trump Coordinate on Ukraine Peace Efforts in Latest Diplomatic Call
The Pilot Barricaded Himself in the Cockpit and Refused to Take Off: "We Are Not Leaving Until I Receive My Salary"
UK Fashion Label LK Bennett Pursues Accelerated Sale Amid Financial Struggles
U.S. Government Warns UK Over Free Speech in Pro-Life Campaigner Prosecution
Newly Released Files Shed Light on Jeffrey Epstein’s Extensive Links to the United Kingdom
Prince William and Prince George Volunteer Together at UK Homelessness Charity
UK Police Arrest Protesters Chanting ‘Globalise the Intifada’ as Authorities Recalibrate Free Speech Enforcement
Scambodia: The World Owes Thailand’s Military a Profound Debt of Gratitude
Women in Partial Nudity — and Bill Clinton in a Dress and Heels: The Images Revealed in the “Epstein Files”
US Envoy Witkoff to Convene Security Advisers from Ukraine, UK, France and Germany in Miami as Peace Efforts Intensify
UK Retailers Report Sharp Pre-Christmas Sales Decline and Weak Outlook, CBI Survey Shows
UK Government Rejects Use of Frozen Russian Assets to Fund Aid for Ukraine
UK Financial Conduct Authority Opens Formal Investigation into WH Smith After Accounting Errors
UK Issues Final Ultimatum to Roman Abramovich Over £2.5bn Chelsea Sale Funds for Ukraine
Rare Pink Fog Sweeps Across Parts of the UK as Met Office Warns of Poor Visibility
UK Police Pledge ‘More Assertive’ Enforcement to Tackle Antisemitism at Protests
UK Police Warn They Will Arrest Protesters Chanting ‘Globalise the Intifada’
Trump Files $10 Billion Defamation Lawsuit Against BBC as Broadcaster Pledges Legal Defence
UK Says U.S. Tech Deal Talks Still Active Despite Washington’s Suspension of Prosperity Pact
UK Mortgage Rules to Give Greater Flexibility to Borrowers With Irregular Incomes
UK Treasury Moves to Position Britain as Leading Global Hub for Crypto Firms
U.S. Freezes £31 Billion Tech Prosperity Deal With Britain Amid Trade Dispute
Prince Harry and Meghan’s Potential UK Return Gains New Momentum Amid Security Review and Royal Dialogue
Zelensky Opens High-Stakes Peace Talks in Berlin with Trump Envoy and European Leaders
Historical Reflections on Press Freedom Emerge Amid Debate Over Trump’s Media Policies
UK Boosts Protection for Jewish Communities After Sydney Hanukkah Attack
UK Government Declines to Comment After ICC Prosecutor Alleges Britain Threatened to Defund Court Over Israel Arrest Warrant
Apple Shutters All Retail Stores in the United Kingdom Under New National COVID-19 Lockdown
US–UK Technology Partnership Strains as Key Trade Disagreements Emerge
UK Police Confirm No Further Action Over Allegation That Andrew Asked Bodyguard to Investigate Virginia Giuffre
Giuffre Family Expresses Deep Disappointment as UK Police Decline New Inquiry Into Andrew Mountbatten-Windsor Claims
Transatlantic Trade Ambitions Hit a Snag as UK–US Deal Faces Emerging Challenges
Ex-ICC Prosecutor Alleges UK Threatened to Withdraw Funding Over Netanyahu Arrest Warrant Bid
UK Disciplinary Tribunal Clears Carter-Ruck Lawyer of Misconduct in OneCoin Case
‘Pink Ladies’ Emerge as Prominent Face of UK Anti-Immigration Protests
Nigel Farage Says Reform UK Has Become Britain’s Largest Party as Labour Membership Falls Sharply
Google DeepMind and UK Government Launch First Automated AI Lab to Accelerate Scientific Discovery
UK Economy Falters Ahead of Budget as Growth Contracts and Confidence Wanes
Australia Approves Increased Foreign Stake in Strategic Defence Shipbuilder
×