London´s economy and how it continues to be a powerhouse

October 15, 2019

Despite the confusion and ambiguity surrounding Brexit, the economy of Britain´s capital city has not only pulled through, but has left all other regions in its dust.

Recent data that shows a 19 per cent growth in London´s economy has since 2012 has clearly highlighted the divide between London and the rest of England.

The Office for National Statistics (ONS) showcased the economic split between English regions in its first set of regional GDP figures for England and Wales. The report also indicated that the north-east accounted for the slowest growth over the same period at just 5.9 per cent.

The ONS figures were compiled by using 1.9million VAT returns supplied by businesses rather than the traditional GDP method of company surveys.

London has always been a city known for its thriving trade and commerce, making it a worldwide hub that boasts one of the largest economies across the globe. It has a GDP of over £565 billion, which is about 17 percent of the UK’s total GDP. The size of its economy is larger than that of several European nations.

In second place, behind London, was the West Midland´s economy – the area home to Jaguar Land Rover, the UK´s biggest car manufacturer. Between 2012 and the end of 2018, the economy grew by 16.5 per cent.

The car industry represents one of England’s biggest economic strengths outside of London. Other companies include Nissan operating a key site in Sunderland, Toyota having a presence in Derby, Mini running a plant in Oxford and Vauxhall operating sites in Ellesmere Port and Luton.

These figures are likely to reinforce suggestions for the government to focus on its industrial strategy which has recently been struggling to gain momentum as the government focuses concentration on Brexit prepartions.

Carys Roberts, chief economist at the IPPR thinktank and head of the Centre for Economic Justice, said: “The fact that growth from all regions of England has consistently lagged behind that from London is a clear indicator that something is wrong in the economy. Such regional inequalities hold back productivity, wages and people’s standard of living and quality of life.

“We need a new industrial strategy act setting out clear goals that focus on putting this right. We should be building high-tech industrial clusters around our many world-leading research-based universities. And we should set up a new national investment bank to invest in infrastructure, innovation and business growth across England.”

 

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