Lockdown has resulted in a £2.3bn ($3bn) hole in the finances of shops, pubs and eateries, according to the Centre for Economics and Business Research (CEBR).
The shift to home working between March and June to stem the spread of the coronavirus has left city centres empty nationwide.
According to the ONS, 30% of adults in the UK were exclusively working from home at the start of July, and many will not return to offices until next year.
“To be frank, [London] looks like a ghost town,” the CEBR said.
CEBR founder Doug McWilliams’s says London’s ‘Flat White Economy’ no longer looks very attractive to the talent it needs.
Home working “has sucked the life out of many central locations,” the CEBR said, as London has lagged behind other regions for the number of people returning to workplaces.
Google mobility data shows that under the peak of lockdown in April, people going to places of work on weekdays in London was 77% lower than before the crisis. This had picked up to 60% lower than the benchmark period of Jan 3 to Feb 6, by June this year.
Calculating the deficit, CEBR gathered data on usual spending by employees near their places of work from research by iZettle and Nationwide (NBS.L). This calculated an average spend of £202 per person per month.
Taking the Google data in addition to these spending statistics and scaling up to the number of employees in London prior to the crisis provided an estimate of the amount of money that is not being spent in shops and in food or drink establishments near employment hubs in London during the coronavirus crisis.
Previous CEBR research shows that when the “new normal” emerges in 2021 it is likely that for London, 30% of employees will still be working at home on any one day, nearly triple the proportion that said they would before the crisis (11.9%).
Scaling from this, the capital will continue to lose out on around £178m per month compared to what was previously spent by employees near their places of work prior to the crisis.