London is setting out to woo foreign investment from companies attracted by the capital’s falling commercial property prices, weak currency and loosening labour market.

Think London, the inward investment agency, has drawn up a plan to turn some of the effects of the recession into potential benefits for international companies looking to expand in Europe.

The economic action plan, due to be launched today by Boris Johnson, the London mayor, at the international property conference MIPIM in Cannes, comes after London was declared cheaper to live in than New York for the first time since 2002 by a cost of living index.

Financial Times