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London’s Economy Surges Ahead of the Rest of England and Wales

The latest figures from the Office for National Statistics show that London has been growing at a rate that puts it clearly ahead of the rest of the country.

Details collated from 2012 up to the end of 2018 show that the UK capital has enjoyed a growth rate of 19% since then. This puts it ahead of the other parts of England and Wales that were covered in the report.

The Best and Worst Figures

While London led the way with 19% growth, the North-East of England was languishing at the opposite end of the scale. This region has the poorest levels of growth, with just 5.9% since 2012.

The closest rival to the capital’s economy came from the West Midlands. This region has grown by 16.5% in the years covered by this report from the ONS. However, it is expected that issues with the car industry – which is a large factor in this area’s success – will see the West Midlands’ economy fall back in the next year or so.

These numbers were pulled together by looking at the data on close to 2 million VAT returns made by businesses across the country. Interestingly. London’s powerful performance was seen to falter slightly in 2018.

2018 Showed Some Interesting Signs

In this final year covered by the report, there was no growth at all shown in London during three of the four quarters. On the other hand, Wales grew by 0.3% in the last quarter of 2018 to top the country’s figures in this period. This was despite concerns about the steel and sheep farming industries.

The blame for London’s sluggish performance in 2018 has been put down to the weakness of the UK’s financial services industry during the year. Growing uncertainty around Brexit has led to the capital losing a large number of jobs. This has also led to a surge of interest in the specialism of International collection services, as firms look to call in overseas debts.

Indeed, a further look into the ONS figures suggests that the financial service industry in London has been in recession for all of 2018 and also including the final 2 quarters of 2017. The building industry here has also slowed, with Brexit again blamed for some big projects being put on hold.

It is also worth noting that the South-West of England reported the biggest shrinkage in terms of economy in the final quarter of 2018. Both the East and South-West of the country produced two consecutive quarters with negative growth levels in 2018.

Conclusion

We can see from this data that London continues to have an economy that is capable of outstripping the rest of England and Wales. Yet, there is also more than a hint that Brexit has caused major issues that could slow down the capital’s growth for some time to come. 

As for the remaining regions, there are some opportunities there but also some major challenges to be overcome.  The next set of figures on this subject will help us to see how the different parts of England and Wales are facing up to the Brexit issue as well as to their regional difficulties.