London Daily

Focus on the big picture.
Tuesday, Sep 30, 2025

London's 19% economic surge underlines divide with rest of England

London's 19% economic surge underlines divide with rest of England

England and Wales GDP figures by ONS show West Midlands is second in growth league

London’s economy has outstripped all other English regions with a 19% surge in growth since 2012, highlighting the divide between the capital and the rest of England.

The Office for National Statistics underlined the city’s disproportionate economic heft in its first set of regional GDP figures for England and Wales, which showed the north-east with the slowest growth over the same period at 5.9%.

The West Midlands economy, home to the UK’s biggest carmaker Jaguar Land Rover, came second to London after it expanded 16.5% over six years from 2012 to the end of 2018.

The figures are likely to reinforce calls for the government to renew focus on its industrial strategy, which is struggling for impetus as Whitehall pours resources into Brexit preparations.

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.”

However, the ONS figures, compiled from about 1.9m VAT returns supplied by businesses rather than the traditional GDP method of company surveys, included quarterly data for 2018 that showed a downturn in London’s fortunes. The capital’s economy showed no growth in the last three months of 2018, while Wales topped the table in the final quarter with growth of 0.3%.

The north-east has the lowest increase in regional GDP since 2012, with London reporting the highest.

A flagging financial services sector was largely to blame for London’s zero growth rate , having been affected by Brexit uncertainty that has resulted in thousands of jobs leaving the capital’s financial district. According to the ONS data, London’s financial services sector has been in recession since the third quarter of 2017. London’s building industry has also proved sensitive to Brexit uncertainty, with a host of projects mothballed. However, the downturns in two key London industries have not reduced the sizeable gap with other parts of the country.

The worst-affected region most recently, according to the new figures, was the south-west. Its economy shrank in the last three months of 2018 compared with a year earlier. The figures also show that the east and south-west of England suffered technical recessions, or two successive quarters of negative growth, last year.

Representatives of the “northern powerhouse” in Manchester and the mayor of the West Midlands, Andy Street, have called for greater powers and more funds for infrastructure projects, including the much-delayed and overbudget HS2 railway line, which is intended to run from London to Birmingham, then Manchester and Leeds. However, the future of HS2 is in doubt after the government confirmed this week that the first phase of the line could be delayed by five years while the cost of the entire route has risen from £55.7bn to up to £88bn.

The Welsh economy grew in the second half of 2018, despite fears that steelworks closures and threats to the livelihoods of sheep farmers would harm the country’s overall economic performance. Construction was the main driver of Wales’s economic performance, while manufacturing output fell.

But it was outstripped in the final quarter of 2018 by the south-east, which expanded by 0.8%.

Economists expect the West Midlands to drop back this year as the dramatic fall in car purchases and production takes its toll on the vehicle industry. Much of the construction boom in Birmingham and the surrounding area has also followed government assurances that HS2 would be operational in the middle of the next decade.

The car industry represents one of England’s biggest economic strengths outside of London, with 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.

The ONS said it planned to continue using VAT data to build a more comprehensive picture of economic growth in the UK, although Scotland and Northern Ireland produce their own data, using a different methodology.

Newsletter

Related Articles

0:00
0:00
Close
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
Explosive Email Shows Sarah Ferguson Begged Forgiveness from Jeffrey Epstein After Taking His Money
×