Cash-Happy London

If you haven't been to London in a while, you won't recognize it. The city hasn't seemed this aliveor expensivein years

In the mid-1990s, London was buzzing as the capital of "Cool Britannia." The international art world was in love with the YBAs (Young British Artists) like Damien Hirst and Tracey Emin, and Brit-pop bands like Blur and Oasis topped the music charts. It was also the era of Tony Blair, the Spice Girls, and avant garde fashion designers like bad boy Alexander McQueen. But then things sort of fizzled. Blair wore out his welcome, the Spice Girls disbanded, there were riots in northern England and the economy struggled, especially in the wake of the adoption of the euro across the rest of the European Union.

Today there's a whole new energy and momentum in the capital. Although no one has coined a nickname for these heady times, much of the buzz is due to a healthy injection of cash. Banking pundits are declaring that London is poised to overtake New York as the financial capital of the world, and City bonuses, although affected by the global credit crunch, are robust. The London-based Centre for Economics & Business Research estimates that the 2007 City bonus pool was £7.4 billion—lower than last year's record high of £8.8 billion but still healthy.

Plutocrat's Playground

Of course, for many visitors, especially those paying in dollars, London has almost never been this expensive. Currently the pound is worth about $2, meaning a trip to a local pub can put an oversize dent in one's wallet. In fact, even many locals are finding London difficult to afford. In the past year, average residential property prices have increased 22.4% to about $703,000, according to, a London-based real estate Web site. The capital can claim to be home to one of the most expensive apartments in the world, the £100 million ($200 million) penthouse at the upcoming One Hyde Park development. That easily beats New York's priciest pad, $150 million for a triplex at the former Mark Hotel. But for international bankers, Russian plutocrats, and Arab sheiks who have designated the city as the favorite urban playground du jour, price isn't a problem.

For those who can afford it, London offers both a rich history and great beauty combined with a dynamic cultural scene. British music, food, fashion, and film are all making headlines around the world. "There's the sense that the whole world is coming to London now," says Geordie Greig, the editor of Tatler magazine. "An event which happens in London will get analysed and copied almost immediately, while an event in New York or Berlin won't get the same level of attention."

And while London clubs like Mahiki are getting worldwide press, home-grown stars like Sienna Miller are becoming global fashion icons, appearing on the cover of American Vogue. Chalk it up to her quirky, eccentric British style as well as her business savvy; Miller recently launched her own clothing line, Twenty8Twelve which is sold at Bergdorf Goodman and Neiman Marcus.

New Life for Classic Style

Old British standbys, such as the Queen's grocer, Fortnum & Mason, also seem to be injected with a new vitality. The 300-year-old department store recently unveiled a new look, along with a gleaming food hall and a revitalized women's fashion department showcasing cutting-edge designers. And while Savile Row will always be synonymous with bespoke tailoring, it's being challenged by a whole new guard, including designers like Timothy Everest, who give classic looks an unexpected twist.

The British social calendar has never looked better. The Serpentine Gallery's summer party is now one of the most important events of the jet set's social calendar, along with the Frieze Art Fair held each October in Regent's Park. "Cool Britannia was seen as a youthful time," says Greig, "but now those artists have matured. The Frieze Art Fair showcases the best artists and global galleries and attracts the wealthiest buyers from all over the world."

Even the old gripes about bad British food can't be applied anymore. After a shaky start in New York, Gordon Ramsay has successfully exported his restaurants and expletive-ridden television shows to the U.S., while still finding time to open new restaurants in London, including his first gastropub, the Narrow, in the hip East London neighbourhood of Limehouse.

So if you think a trip to London sounds like a good plan for the new year, you'd better have some of the resources of local billionaires Roman Abramovich or Arcelor-Mittal's (MT) Lakshmi Mittal to really enjoy yourself. But don't be surprised if you don't hear a lot of English spoken on the street. These days most Londoners seem to be visiting the States to take advantage of a favorable exchange rate.

Click here to see a round up of the today's grooviest places in London.

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