Retail analysts have predicted that the UK will become the leading luxury shopping market in Europe by 2018.

According to the latest report published by retail research agency Conlumino, this European sector will be worth £96billion by this point – an increase of £24billion compared with 2013.

Clothing, jewellery/watches and drinks are the major players in this rapidly expanding sector.

As it stands, the UK currently has the third largest cut of the luxury market in Europe, followed by Germany and Russia. The top two spots are taken by France and Italy, countries famed for their upmarket offerings.

If British businesses selling luxury products are to dominate as this forecast suggests, the UK would have taken the top spot with a 19.6% share by 2018.

London’s status as a global luxury destination is on the increase

From world-famous department stores such as Harrods and Selfridges to the popularity of social season events like Ascot, Wimbledon and Henley, London continues to draw more and more well-off consumers looking to invest in luxury goods and lavish lifestyles.

While the UK’s luxury economy is on the rise, the economies in France and Italy are said to be performing poorly, restricting the spending of resident consumers.

London’s large financial centre was also mentioned as a major factor in attracting luxury consumers, as was the trend for people from oil-rich countries in the Middle East spending time in London to avoid the scorching heat back home.

Maureen Hinton, Group Research Director at Conlumino, said: “Over recent years London’s status as a global luxury destination has increased as more and more luxury brands have opened flagship stores, and property companies and developers have transformed areas such as Bond Street and Regent Street making them far more attractive to global brands.

“Moreover, other areas of London have also boosted their luxury status. Knightsbridge and Sloane Street house many international brands’ stores and more recently Mayfair’s Mount Street and surrounding area has become a destination for brands such as Balenciaga, Marc Jacobs, Oscar de la Renta and Celine to open more discreet stores catering for very rich clientele who often live locally or are staying at prestigious hotels like the Connaught.”