Employment in London may not return to pre-pandemic levels until 2023 despite strong economic growth this year, according to a new City Hall report.

The GLA’s latest London’s Economic Outlook report has found that while London’s economy will bounce back as lockdown restrictions are eased, unemployment will persist in industries such as culture, hospitality and retail due to the “negative shock” caused by the drop in international visitors.

Mayor of London Sadiq Khan has said he is “optimistic” that London’s economy will see “strong levels of growth” in 2021 but has warned that it is “essential” for the Government to extend support such as the furlough scheme, set to end in September, and business rates holidays, set to end in the summer.

Mr Khan said: “As Covid restrictions continue to be lifted, I’m optimistic that much of London’s economy will see strong levels of growth this year, and we will bounce back from this economic crisis like we have with previous economic shocks.

“But what these new figures show today is that with international tourism and footfall not likely to return to pre-pandemic levels this year, jobs in several key sectors still remain at risk when the furlough scheme comes to an end this September.

“I’m doing all I can to support jobs, including launching a huge domestic tourism campaign this month to support our businesses across hospitality, culture and retail – but it would be complacent of ministers to suggest employment levels will simply return to normal, even with our world-leading eco-system of shops, hospitality and cultural venues opening up again.”

The new report from City Hall has found that London’s gross value added, a measure of economic productivity, is set to increase by an “eye-catching” 5.4 per cent this year before rising again to 6.9 per cent in 2022.

But the number of workforce jobs in the capital is set to fall again this year by 3.6 per cent before recovering slightly in 2022, increasing by 2.9 per cent.

With consumer spending from overseas tourists in London falling by more than £7 billion in 2020, and restrictions on international travel remaining in place, jobs in the retail, culture and hospitality industries are likely to remain at risk and employment levels are not expected to return to pre-pandemic levels until the second quarter of 2023.

Earlier this month following his re-election as Mayor of London, Sadiq Khan launched the £6 million “Let’s Do London” campaign aimed at attracting domestic visitors back to London to mitigate the impact of continuing international travel restrictions.

The campaign will aim to boost the economy of central London and the West End, with spending by domestic visitors falling by £3.5 billion in 2020 compared to the year before.