Cycling is worth more than £3 billion to the UK economy, according to a report released by the London School of Economics.

The figure reflects factors such as bicycle manufacturing, the retail environment and employment – with the country’s 13m cyclists, including more than a million who started riding last year, each worth £230 to the economy.

The report states 3.7m bikes were bought in 2010, a 28 per cent increase on 2009, of which £51m-worth were British-built, while £853m was spent on cycling accessories.

Frequent cyclists are said to be worth £958m to the economy, while regular riders are valued at £717m and occasional cyclists at £801m.

“The good news is that structural, economic, social and health factors seem finally to have created a true step-change in the UK’s cycling scene,” said Dr Alexander Grous, of the LSE, who conducted the research.

Forty per cent of households now own a bike, while Britain’s improved cycle network, expanded by 12,000 miles, commuting, the environment, health and the Olympic Games have all been identified as possible factors for increasing the popularity of the sport.

The report, commissioned by Sky and British Cycling, says that, on average, regular cyclists take 7.4 sick days per year, compared with 8.7 sick days for non-cyclists, saving employers £128m per year, and a projected £2bn over the next 10 years.

An estimated 20 per cent increase in cycling levels by 2015 would save Britain’s economy more than £430m in reduced congestion, NHS costs and pollution levels.

Transport minister Theresa Villiers said: “The government is committed to encouraging cycling as a healthy and enjoyable way of getting around.

“It helps reduce congestion, gives children more opportunities for exercise, and it can play a part in the fight against climate change.”

Stewart Kellett, British Cycling’s recreation director, added: “This report is further evidence that when more people get involved in cycling there are measurable benefits to the individual, their family, their employer, the environment and the economy as whole.”