London is the only UK region whose number of “payroll employees” has yet to return to pre-pandemic levels, according to government figures released today.

Estimates by the Office for National Statistics (ONS) show that the capital saw a steady recovery in the number of workers on employers’ books over July, August and September, with an increase of 0.9 per cent compared with the previous thee months.

However, that figure still falls slightly short of the level during the first quarter of 2020, which mostly preceded the impacts of Covid-19, and the ONS says that the capital has still failed to catch up “between September and October 2021“, the only UK region in that position.

The growth in payroll employees in the accommodation and food service sectors in London has been the slowest in the country, reflecting the damage done by Covid to the economy of the West End in particular. Meanwhile, there has been ongoing negative growth in the transport and storage sectors.

The new figures also show that London has continued to have the UK’s highest unemployment rate at 5.6 per cent, which is a small decrease on the preceding quarter of 0.2 per cent.

Responding to the figures, Nick Bowes, chief executive of think tank Centre for London, said: “With so much of the levelling up agenda focused on areas outside of London, today’s data is a stark reminder that the city’s economy can’t be relied on to just bounce back under its own steam and that London has large levelling up challenges of its own.”

London business groups and the capital’s Mayor, Sadiq Khan, have repeatedly called on the government to provide tailored support to the capital, whose economy is responsible for nearly one quarter of all UK economic output and generates taxes spent elsewhere in the country worth close to £40 billion a year.

The government has so far refused to provide Transport for London, whose fare-dependent finances have been wrecked by the flight from public transport, with the long-term funding arrangement it says it needs leading to fears that service cuts and steep far increases will be imposed after the latest short term deal expires on 11 December.

Dave Hill: London employment recovery is country’s slowest, new government figures show