London’s financial system is the perfect performing within the UK, recording the quickest enlargement and smallest impression from coronavirus, based on information that emphasises the federal government’s problem to “stage up” the nation.
Output within the UK’s capital rose 0.9 per cent between the second and third quarters of final yr, far outstripping the 0.1 per cent nationwide contraction, the Workplace for Nationwide Statistics disclosed on Thursday.
Output in Wales and Scotland fell by 2 per cent and 0.3 per cent respectively throughout the identical interval, whereas progress was flat in Northern Eire and England, the place London carried out finest.
The enlargement within the capital contrasted with a 1.6 per cent contraction within the East Midlands, the worst-performing English area.
Susannah Streeter, senior funding analyst at asset supervisor Hargreaves Lansdown, stated: “London has saved the UK financial system ticking over, and progress within the capital has been masking a disappointing efficiency throughout a lot of the remainder of the UK.”
Levelling up — lowering the massive regional inequalities throughout the nation — was a key theme of the ruling Conservative get together’s 2019 election marketing campaign. Levelling up secretary Michael Gove revealed a white paper final yr to sort out the difficulty.
Nonetheless, Streeter stated that the primary spherical of levelling up insurance policies “clearly did not make a lot of an impression on shifting the financial dial a lot for areas in want, with London nonetheless showing to be the magnet for funding”.
London, which is by far the richest area within the nation, was additionally the perfect performing in contrast with pre-pandemic ranges. Whereas output throughout the UK has not but regained the extent it achieved within the fourth quarter of 2019, it was 4.4 per cent increased within the capital. Within the midlands and East of England, output was nonetheless greater than 2 per cent under its pre-pandemic ranges.
Krishan Shah, economist on the Decision Basis, a think-tank, stated the figures for London had been “defying pandemic predictions of the loss of life of cities”.
The ONS information confirmed that London’s financial system, relative to pre-pandemic ranges, was boosted by sturdy progress in data, communication and monetary providers, which account for a bigger share of output within the capital than in different areas. In distinction, output in different sectors, together with development, actual property and manufacturing, was nonetheless under pre-pandemic ranges.
“Stronger efficiency for London largely displays progress in sectors wherein London is robust, akin to skilled providers and digital, and London’s very low reliance on manufacturing,” stated Richard Holt, director of world cities analysis on the consultancy Oxford Economics.
Holt forecast that the capital would additionally see stronger progress than different UK areas in 2023.
The Division for Levelling Up, Housing and Communities didn’t instantly reply to a request for remark.