Are we seeing a repeat of pre-crash trends?
New figures on regional economic performance published today by the Office for National Statistics (ONS) show that the economy is growing much faster in London than the rest of the UK.
Since 2009, the low point of the economic crisis, London has seen the strongest growth in gross value added (GVA) of the major UK cities, increasing by 28.9 per cent over the five years to 2014 compared to 17.6 per cent in the rest of the UK.
Yorkshire and the Humber saw the lowest growth between 2009 and 2014,at 12.2 per cent. Growth in Northern Ireland was also relatively slow, at 12.3 per cent. The South East and West Midlands experienced the fastest growth behind London.
Analysis by the TUC suggests that a large part of the difference in growth rates is accounted for by finance and real estate. The TUC says this is cause for concern as it means growth in the capital may be too dependent on rising asset prices; meanwhile the rest of the UK is struggling to gain the investment it urgently needs.
TUC General Secretary Frances O’Grady said:
“It’s good to see growth across all of the UK’s nations and regions, but outside of London many areas are still in the slow lane. The government must do more to support the whole of the UK.
“Despite London’s stronger performance, the risk is that we are simply seeing a re-run of pre-crash trends. Instead of relying on the financial sector and booming house prices the government needs a proper industrial policy that can shift investment towards the skills, infrastructure and new technology we urgently need for the future.”
Ruby Stockham is a staff writer at Left Foot ForwardLike this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.