Open for Business’ City Ratings is a global benchmark of 149 cities based on both economic competitiveness and LGBTQ+ inclusion across a range of indicators. The ratings (ranging from AAA to E) use a combination of respected and recognised global data sources. The 2025 edition was produced with data partner Oxford Economics.

In 2025, London was downgraded for the first time in the City Ratings’ history. This took the capital city from an ‘AAA’ grade to ‘AA’. It now sits alongside the likes of Atlanta, Munich, and Oslo, as opposed to Amsterdam, Copenhagen, and Zurich. London’s downgrade comprises declines in four specific areas:

Rates of reported anti-LGBTQ+ hate crimes

• LGBTQ+ legal framework in the UK

• The city and country’s innovation potential

• London’s business environment

1. Rates of Reported Anti-LGBTQ+ Hate Crimes

Official police crime figures from the UK’s Home Office for 2022-2023 and 2023-2024 show a year-on-year increase in reported hate crimes against LGBTQ+ individuals in Greater London. These offenses include violence (with and without injury), stalking and harassment, public order offenses, criminal damage and arson, and other notifiable offenses.

According to the data, reports of hate crimes based on sexual orientation in Greater London increased from 3498 to 3737 cases (a 6.83% annual increase), and against trans people from 412 to 526 cases (an alarming 27.67% annual increase)(1). This substantial rise in hate crimes against the LGBTQ+ community, particularly against trans individuals, significantly impacted the city's LGBTQ+ inclusiveness score.

2. LGBTQ+ Legal Framework in the UK

The indefinite legal ban on the prescription of puberty blockers to trans and gender non-conforming young people in 2024 negatively affects the mental health status of trans and gender non-conforming people nationwide, by exacerbating gender dysphoria and increasing risks of mental health struggles, including anxiety, depression, and suicidal tendencies (2). There is still no ban on "conversion therapies" at either the city or national level, and there have been no advancements in anti-discrimination protections, particularly concerning gender identity, gender expression, or sex characteristics. According to ILGA, gaps persist in protections across goods and services, education, housing, employment, interventions on intersex people, and legal gender recognition, which are necessary to fully cover all expressions of people’s sexuality (3).

3. The City and Country’s Innovation Potential

Based on the results from the Innovation State of the Nation Survey 2024, there is an ongoing decline in innovation levels in UK firms, with a third of surveyed firms stating that recruitment difficulties were restricting their innovation work (in other words, missed allocation of a skilled and connected workforce) (4). Sales growth also fell from 10% to 7% among firms that are catalogued as innovators (5). Specifically, London saw a decline in external advice towards innovation (such as business advice, leadership, and management training) (6), product innovation (7), process innovation (8), and investment in future innovation (9), compared to 2023.

4. London’s Business Environment

Both the UK and London’s business environment faced several challenges throughout the year. Nationally, there has been an ongoing decline in Foreign Direct Investment (FDI) in the UK since 2022 (10), and a slow and declining GDP growth through 2024 (with UK GDP only increasing by 0.1% in Q3 2024) (11). Also, according to the EY UK Attractiveness Survey, the UK recorded 853 Foreign Direct Investment (FDI) projects in 2024, a 13% decline from 2023. Although Greater London remained Europe’s leading region for investment for the second year in a row, attracting 265 projects in 2024, the city saw a 26.2% decline on the 359 projects it recorded in 2023. The 2024 total is also London’s lowest in the past decade, and less than half the number secured in 2019, when it attracted 538 projects (12).

Conclusion: A Wake-Up Call for Inclusive Recovery

London’s downgrade in Open for Business’ 2025 City Ratings highlights significant challenges across both economic performance and LGBTQ+ inclusion. The city has faced declining innovation capacity, a weakening business environment reflected in reduced foreign direct investment and slow GDP growth, and fewer new international investment projects. At the same time, an uptick in reported incidents of anti-LGBTQ+ hate and ongoing gaps in legal protections have contributed to a lower inclusion score. Addressing these interconnected issues will be key for London to position itself more strongly as a global player, by: 

• Implementing measures to reduce hate crimes against LGBTQ+ individuals, hand in hand between civil society and government officials, through targeted prevention campaigns, investing in projects addressing hate crimes against LGBTQ+ people, incentivizing the reporting of hate crimes, and improving the support to victims.

• Ban "conversion therapies" at both the city and national levels. 

• Advance anti-discrimination protections, particularly concerning gender identity, gender expression, or sex characteristics.

• Address the gaps in legal protections identified by ILGA, which include goods and services, education, housing, employment, interventions on intersex people, and legal gender recognition.

• Reviewing or modifying the puberty blocker ban for young people, as a path to improve the mental health and well-being of trans individuals, which contributes to the overall inclusion score.

Methodology

Economic Competitiveness is assessed across five sub-categories:

• Economic performance: It analyses a city’s wealth, its home nation’s wealth and competitiveness.

• Innovation: It analyses a city’s and its home nation’s potential for innovation. 

• Business environment: It analyses how supportive a city is for businesses to flourish. 

• Human capital: It analyses a city’s level of education and proclivity to attract skilled individuals. 

• Entrepreneurship: It analyses a city’s level of entrepreneurial activity and how supportive its home nation is of new businesses.

LGBTQ+ Inclusiveness is divided into two sub-categories:

• Social attitudes: It analyses a city’s and its home nation’s attitudes toward LGBTQ+ people. The Williams Institute’s Global Acceptance Index is used as a national indicator of attitudes and their trend over time.

• Legal situation: It analyses the city’s legal situation for LGBTQ+ people and the indicators that create a strong foundation for LGBTQ+ inclusion, such as a lack of corruption, strong civil liberties, and press freedom.