According to the Centre for Economics and Business Research (CEBR), London’s economy has remained largely unaffected by the July bombing attacks and a pre-2012 Olympic spending boom in the capital – led by the construction industry – will occur in 2008-2009.

CEBR analysts have claimed that London’s 2005 economic growth will only be down 0.1 per cent on predictions made in May, before the July attacks.

However, for 2006, CEBR has forecast a slowdown in the capital’s economy from 2.7 per cent in 2005 to 1.9 per cent, due to the combination of a slower world economy and a reduction in tourism as a direct result of terrorism. Looking ahead, London’s economic growth in 2008 and 2009 will be driven by pre-2012 Olympic Games spending.

CEBR’s chief executive, Douglas McWilliams, also cautioned against London suffering a post-2012 “hangover” by insuring that pre-Olympic spending is focused on building a solid infrastructure which will support the capital’s economy after the Olympics.

Managing economist at CEBR, Dominic Walley, said: “London has done pretty well this year to shrug off the impact of the bombing, but next year may be tougher – there is likely to be an impact on tourism and it will be difficult for the city to do as well as the world economy slows down.” Details: www.cebr.com