Pollution has been linked to heart and lung disease, and people often complain of other less serious reactions such as sore-throats, coughs and stinging eyes. I have often noticed that if I cycle a few miles in London in a white t shirt, it picks up lots of black particulates.
It's impossible to quantify the pollution level for a city in any simple way, because the level of pollution varies from area to area, and will change over time. The type of contaminants found in a certain area can also vary, and each one causes different health problems. Weather and temperature also affect how much of an effect pollution will have. On windy, cold days, a certain road will be safer to bike through than on a still, warm day. This is probably a good thing, because we have a lot of windy, cold days in London.You breathe much heavier when cycling, so you inhale more polluted air than normal. One partial solution is to avoid congested roads, which should reduce the amount of fumes you are exposed to. However, in a busy city like London this isn't always possible. Another possibility is to wear a pollution mask, but the protection they provide varies.
You will notice if you look at the websites of companies which sell masks that they rarely make any quantified claims about effectiveness, and some never explicitly claim to protect you against pollution at all.
'Health Which?' magazine conducted a study that compared the protection offered by several types of mask, you need to register to read it, but helpfully the BBC have posted a summary. Bizarrely, the cheapest mask on offer, the Kanco Eezy Breethe, performed the best. Other, more expensive masks failed to filter out the poisonous chemicals.
Overall though, the benefits you gain from cycling and keeping healthy should outweigh the negative aspects of breathing in the fumes. Everyone in a large city is exposed to a certain amount of pollution, including people inside vehicles, and you can't travel without breathing in something nasty. Of course, if everyone cycled to work then we wouldn't have this problem…