The bustle of the City of London still a long way off
London — With a flurry of re-openings, the City of London has spent the past few weeks advertising its exit from lockdown. The first few in-person events suggest there’s a long way to go before the return of the hustle and bustle that was the financial centre’s lifeblood.
“No refreshments will be offered and there will be no mingling,” HSBC Holdings warned shareholders after deciding to allow a small number of them to attend its annual general meeting (AGM) in central London in May.
One attendee at a recent dinner hosted by an accountancy firm in the City, who asked not to be named as the meeting wasn’t public, said the evening began with a Covid-19 test and seats 2m apart. With no waiter service, food was already on the tables, along with wine bottles for guests to pour themselves. The initial gatherings serve as both a mark of progress and an awkward reminder that open doesn’t mean normal. The City’s narrow alleys and small resident population rob it of the outdoor dining and pedestrian flow that have given other parts of the capital a sense of post-lockdown revival. But global firms have indicated more workers will soon be returning to the office — if UK health officials don’t reverse course.
The speed of any return to business-as-usual, if that’s even feasible, has big implications for the vast urban economy underpinned by the City, a key engine of the UK economy. About half-a-million commuters used to enter the central London district every working day, supporting thousands of firms, from restaurants to suit sellers.
Most will struggle while the flow of people returning remains a trickle after three national lockdowns. Foot traffic levels in the main London offices of US banks such as Goldman Sachs and JPMorgan Chase were estimated to be about 24% of the pre-pandemic norm by mid-May, according to an analysis by Orbital Insight, which monitors activity levels through satellites and mobile phone data.
The headquarters of British banks such as HSBC are even quieter and this seems set to continue. Standard Chartered has formalised flexible working arrangements for most of its staff. NatWest has said it expected just 13% of its staff to work mostly from the office after the pandemic.
For those returning, office life is now punctuated by Covid-19 tests and face masks. Changes such as touchless lifts and flexible meeting rooms are being introduced in buildings across the city; but with capacity constrained by social distancing, a wholesale return to the office seems unlikely any time soon.
That means the commute is operating to a different drumbeat too. The subway line that shuttles workers between the centre of the Square Mile and London’s Waterloo station restarted on Monday after a 15-month hiatus. But only for the peak hours, with capacity a far cry from the millions of commuters it used to accommodate every year.
While AGMs are also operating under new rules, even socially distanced gatherings can retain their pre-pandemic anarchic streak. Lloyds’s scaled-back investor meeting in Edinburgh in May saw one of its shareholders accost the directors for about 15 minutes, forcing a brief pause in the meeting as security removed him from the building.
“Get off me, you’re too close to me,” the Lloyds investor shouted as he was hustled out of the hall.
Multiple Covid tests
The Lord Mayor of London, traditionally a jet-setting ambassador for the City, has stepped out on several tours of venues that have reopened, to encourage the return to the office, though he expects the working week to look very different.
“Fridays may be rather quiet because everyone wants to do Tuesday, Wednesday, Thursday, but I think in 12 months more people will come back to the office than we’re envisaging at the moment,” William Russell said during one of his visiting rounds, which saw him take multiple Covid-19 tests a day to demonstrate the venues’ capacities. “It’s going to be a slow progress but I’m confident because at the end of the day, people will want to socialise.”
The city’s hospitality offerings should help attract those workers back. But the City of London’s density makes it tricky for many venues to offer outdoor service in line with ongoing Covid-19 rules. According to the City’s administrative body, there were just eight applications pending for free “pavement licences” on June 2 — leaving most venues reliant on indoor entertaining, which is still subject to social distancing and other curbs.
For those with outdoor space, London’s sometimes dour weather complicated early reopening efforts. “I was like, of course it’s snowing, we’re opening the terrace,” Julie Blay, head of hospitality at grocer Fortnum & Mason, said when the firm’s bar and restaurant in the City’s Royal Exchange launched an alfresco operation in April.
Blay is also preparing for Wednesday to become the new Friday for eating out. Bookings could build up as firms including JPMorgan Chase and Goldman Sachs recall workers to their City bases in the coming weeks. The UK government will soon announce whether restrictions will be lifted entirely as planned on June 21, amid concerns about increasing cases of new Covid-19 variants.
Even then, eating and entertaining in offices — as opposed to restaurants — may still dominate. Just don’t expect a buffet table. Hospitality is being designed instead around individually packaged portions, according to Dominic Blakemore, CEO of catering company Compass.
“Because of health and safety protocols a lot is about placing meals, bento boxes or equivalents so that there’s a real sense of hygiene around what they’re consuming,” he said. “We still feel that there’ll be less desire to go out onto the high street and use the office experience more.”
Still, no matter the precautions, some habits die hard.
At the accountancy firm event, after the speeches and several carefully distanced courses, the party of about 20 stood up to shake hands with one another — social distancing making way for English politeness.
Bloomberg News. More stories like this are available on bloomberg.com
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