London Briefing: Police and other forms of security are becoming more evident every day, but last Thursday, like the previous week, the capital was flooded with a more overt police presence than any of us can remember.

It's probably apocryphal, but the most repeated story was the one about it now being pointless to ask a bobby for directions since the chances are he is from Manchester and he is carrying an A to Z.

While crossing London Bridge just before 7am, I saw little evidence of racial profiling. In fact, if I was a white van driver, I would be writing letters to the Guardian. Now, white vans are the largest daily nuisance faced by Londoners, prior to July 7th at any rate, and few people would have been sorry to see them being stopped and their occupants - white Essex men - quickly separated for questioning by gun-toting police. The ratio was about three police vans to one white van: rough justice maybe, but it brought a smile to those of us who have spent years being cut up by young men with unintelligible accents and an inexhaustible supply of white socks.

It's difficult to tell, since it is August, but London does seem to be less busy than usual. Perhaps one or two people are staying away. But the holiday season, the £8 (€11.50) congestion charge and Britain's economic slowdown may be bigger culprits than terrorism.

There has been much written about the economic and financial market consequences of the bombings and near-bombings: anecdotal stories about retailers feeling the pinch and hoteliers facing falling occupancy rates have to be assessed while trying to figure out whether or not subdued economic activity was destined to happen anyway.

It is undoubtedly the case that central London retailing will have had its soft patch made much worse by the attacks.

The question now is whether or not things will quickly bounce back to normal. That, in turn, raises the question of just what is normal? Last week's interest rate cut would have happened with or without terrorism for the simple fact that the economy is slowing.

Retailers are being hit in obvious ways - the slowdown in the housing market has obvious implications - and in one or two new ways. Broadband internet access has become mainstream in the UK and it seems that the shopping habits of a nation are evolving very rapidly.

Admitting to having only dial-up internet access is a fashion faux pas akin to expressing admiration for the Bay City Rollers. I suspect that recorded statistics, such as they are, are underestimating the rapid growth of online shopping.

Most people now realise that there is little that cannot be bought online and that it is usually cheaper to do so.

Indeed, many people now believe the only reason to visit a bricks-and-mortar shop, as opposed to Amazon.com, is for the social experience. It certainly isn't because of price or any other tangible reason.

About the only things that people actively shun on the net are perishable goods, for obvious reasons. And I'll bet that some bright spark at Tesco is working out how you can select online the very same perfect cherry tomatoes that will be delivered to your door this evening, instead of the crushed ones inevitably packed by some bored, spotty youth.

If terrorism and Google are accelerating the demise of old-style retailing, what are city centres and out of town malls going to do with all that space?

Bookstores were the first to feel the effects of online shopping and responded by updating their premises and installing coffee shops. Diversification into something that cannot be done on the net seems to be the order of the day and that something looks like involving interacting with other people. I would call that progress of sorts.

According to opinion polls, the majority of Londoners now expect another terrorist attack within the next 12 months. This firm expectation will inevitably have consequences that cannot be imagined today. One business that appears to be booming is the bicycle trade. Several businesses around the capital have reported a sudden surge in sales. Cycling had been making a bit of a comeback anyway, thanks to the health industry and the congestion charge. Taxis are also reporting an unexpected rise in business volumes. Another consequence that I would predict is much lower non-terrorist crime.

Sadly, the economic consequences will mostly depend on how much more terrorism we see. London is keeping its fingers crossed but is realistic about what might happen next.

• Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.