Mick Jones: The initial inspiration for the song "London Calling" wasn't British politics. It was our fear of drowning. In 1979 we saw a headline on the front of the London Evening Standard warning that the North Sea might rise and push up the Thames, flooding the city. We flipped. To us, the headline was just another example of how everything was coming undone.

It's also a metaphor for economic struggles, according to Rock Genius:

This comes from concerns that if the River Thames flooded, most of central London would drown, something that led to the construction of the Thames Barrier.

Furthermore, the lyric is a metaphor for London’s economic struggles and class inequalities. If the river was represented as the lowest part of the totem pole in London’s class system, and Strummer lives by the river, then he’d be the first to drown.

More: http://rock.rapgenius.com/The-clash-london-calling-lyrics