London Mayor Sadiq Khan has unveiled an ambitious strategy to boost the capital’s economy by over £100bn within the next decade.

Announcing what he calls the London Growth Plan, Khan outlined his intention to invest hundreds of millions of pounds in devolved funding to restore the city’s annual productivity growth to pre-2008 financial crisis levels.

Focusing on key areas such as housing, transport, workforce training, high street revitalization, and business support, he described the initiative as a way to "turbo-charge" London’s role as the UK’s economic powerhouse.

The plan includes allocating more than £300m in central government skills funding to local programs, with the goal of creating over 150,000 jobs. This initiative prioritizes fair wages and quality employment, aligning with a pledge Khan made during his re-election campaign for a historic third term in May.

Significant upgrades to London’s transport system are also part of the proposal, including extending the Docklands Light Railway to Thamesmead in the southeast, expanding the Bakerloo line south to Lewisham, and introducing a West London Orbital overground service by repurposing existing railway tracks.

A core element of Khan’s goal to add £107bn to London’s economy by 2035 is revitalizing productivity growth, which has lagged in both the UK and other advanced economies since the 2008 financial crisis.

Productivity growth—measured as output per hour worked—is a key factor in raising living standards by allowing businesses to offer higher wages. Between 1998 and 2007, London’s productivity increased by an average of 3.16% annually. However, this dropped sharply to just 0.12% per year between 2008 and 2022.

To meet Khan’s targets, London’s productivity growth would need to average 2% per year from 2025 to 2035. If achieved, this would equate to an additional £11,000 per person for London’s nearly nine million residents and an extra £27.5bn in tax revenue for the Treasury by 2035.

However, reaching these goals would require a dramatic shift from recent trends.

Despite being the UK’s most productive region—outperforming the national average by more than 25%—London has experienced a sharper decline in growth rates over the past 15 years. According to City Hall’s own analysis, London’s productivity increased by just 1.5% in real terms between 2008 and 2021, significantly trailing the UK-wide growth rate of 6.9% over the same period.

National productivity levels have been declining in recent years, and the Office for Budget Responsibility predicts that the trend growth rate will only reach 1.25% by 2029. The latest regional data indicates that London’s productivity dropped by 0.9% in 2022—the steepest decline of any UK region.

Khan described his plan as a "golden opportunity to supercharge growth and unlock London’s full potential—for the benefit of all Londoners and the entire country."

"Ultimately, growth is meaningless if people don’t experience its benefits or see tangible improvements in their communities. Our aim is to drive economic growth across every part of London, helping to raise living standards, increase disposable incomes, and allow greater investment in public services as we work toward building a fairer, more prosperous city for all," he said.