An artist’s impression on how the £800m Pinnacle will look (Ken Pederson Fox)
An artist’s impression on how the £800m Pinnacle will look (Ken Pederson Fox)

Construction on the City of London's tallest tower, Bishopsgate Tower, has halted because of a lack of funding and lack of tenants.

Work on the £800m Bishopsgate Tower - commonly known as 'the Pinnacle' - has ceased after the completion of just seven of the 64 floors, putting into doubt whether the building will ever be finished.

If construction does finish, its intended height of 288m would make it the second-tallest skyscraper in Europe, behind the soon-to-be completed Shard, across the River Thames at London Bridge.

The developers, Arab Investors, have failed to sign up any major tenants to occupy the tower, with only around 10 percent of the eventual 900,000 square feet of space has been let.

Work on the Pinnacle had previously halted last autumn but started again when HSBC was appointed to secure the next stage of funding.

An Arab Investments spokesman said it was "the same problem as last year. They still need a pre-let in order to unlock the development finance."

The global economic crisis has seen many major companies reluctant to commit to expensive office spaces. Reuters reports four most prominent towers under construction, the Shard, 20 Fenchurch Street (Walkie-Talkie), 122 Leadenhall Street (Cheesegrater) and the Bishopsgate Tower, have signed only a single office deal between them.

Construction work being stopped on the Pinnacle could be seen as a sign that the world's economic crisis does not look like to be improving anytime soon and that the UK is heading deep into another recession.

A recent report from Barclays has warned of an "unhealthy correlation" between an increase in the number of skyscrapers being built and a recession which shortly follows.

The report gave The Empire State Building in New York being built just before the Great Depression and the Burj Khalifa, constructed before Dubai narrowly avoided going bust in 2010, as examples of this theory.

Scheduled completion of the Pinnacle has been set back to 2015.

Skyscraper Boom may Hurt India and China [SLIDESHOW]

China Dubai Barclays HSBC