Increases one half of capital letter (7)
I believe the answer is:
upsilon
'letter' is the definition.
(I know that upsilon is a type of letter)
'increases one half of capital' is the wordplay.
'increases' becomes 'ups' (upping is a kind of increasing).
'one' becomes 'i' (Roman numeral).
'half of capital' becomes 'lon' (half of 'London').
'ups'+'i'+'lon'='UPSILON'
(Other definitions for upsilon that I've seen before include "Character from abroad" , "Greek character" , "Greek 'u'" , "Greek letter" .)