The State of Britain

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The capital’s economy shrinks by 7.4% following lockdown but data for an earlier pre-pandemic period shows strong growth with a big uplift in production

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A nowcast for London for the 12 months ended June 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the capital’s economy contracted by 7.4%.

This ranked the city last in the UK and suggests the capital’s economy has so far coped ‘poorer’ with the pandemic relative to the other eleven UK ‘regions’. Over the same period the East Midlands was ‘best’ with a fall of 4.5%, with London’s contraction the ‘worst’; the UK decline according to the Office for National Statistics (‘ONS’) figures was 5.3%.

ESCoE is a partnership of research institutions and the ONS and has highlighted that during these unprecedented times, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to December 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil, show the capital’s performance relative to other parts of the UK. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fifth estimate for London, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended December 2019 with the same quarter a year earlier. These showed that London’s growth was 5%, the same as the previous quarter. This placed the capital first (previous ranking also first) out of the twelve UK ‘regions’.

London topped the table whilst UK growth over the same period was 0.9%. The West Midlands was again the worst performer and contracted by 2.7%. The North East, Wales, East Midlands and the North West were the other ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to December 2019 showed a worsening picture in London with the data poorer than the previous quarter. The capital’s economy grew by 0.5% in October to December 2019, following +1.5% in July to September 2019.

This placed London second (previous ranking first) out of the twelve UK ‘regions. London was one of five regions of the UK that saw their economies grow but overall UK growth was flat.

The SW was top with quarterly growth of 0.8% whilst the North East was bottom, posting a drop of 1.3%.

In this period, London’s best sector was water supply with growth of 14.7% but mining fell by 6.4%. Overall production was +3.2%, construction -0.2%, services 0.4% and agriculture -5.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the city was 4,000 lower at 235,000 between April and June; the drop of 0.1% took the rate to 4.6%. At 5.2% the North East was the highest; Northern Ireland had the lowest rate of 2.5%, with the UK rate at 3.9%.

The South East had the highest employment rate at 79.7%, this compared with 71.7% in Northern Ireland and 76.5% in London where 4.8m are employed; the UK rate was 76.4%.

Housing

The capital’s average property price fell by 1.6% in April 2020 to £480,425. The drop took the annual increase to 2.3%. In comparison, UK prices dropped by 0.2% to £234,612 during April, an annual growth rate of 2.6%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the April figures will therefore reflect those completions that occurred before lockdown.

This is the first publication of the UK HPI since it was suspended in May 2020. The UK Property Transactions Statistics for April 2020 showed that that between March 2020 and April 2020, transactions decreased by 55.5%.

Average incomes in Kensington over £50K more than in Nottingham

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This month the ONS published regional household disposal income figures for 2018. Total gross disposable household income (GDHI) in the UK in 2018 was £1.4bn. Of that, 86.3% was in England, 7.6% was in Scotland, 3.8% was in Wales and 2.3% was in Northern Ireland.

The average UK income per head after direct and indirect taxes were taken off was £21,109.  England was the only country above the UK average at £21,609 but growth in incomes was best in Scotland and Northern Ireland at 5.1% and 4.7%. England’s growth was the same as the UK at 4.6%; Wales grew by 4.4%.

At a regional level, London had the highest GDHI per head where, on average, each person had £29,362 available to spend or save; the North East had the lowest at £16,995 which compares with a UK average of £21,109.

At a local level, Kensington and Chelsea and Hammersmith and Fulham district had the highest GDHI per head at £63,286 with Nottingham the lowest at £13,138. All the top 10 local areas were in London or the South East with the bottom 10 within the North West, Yorkshire and The Humber, East Midlands, West Midlands, and Northern Ireland regions.

The poorest areas of the capital were Barking at £20,673, beating Hackney at £21,118. Barking was ranked 65th in the UK but this was over 100 places above bottom placed Nottingham and Leicester.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%.

At the local level, Kensington & Chelsea and Hammersmith & Fulham was again best in the UK with growth of 7.6% whereas Luton was the worst and only grew by 0.9%. Westminster was the worst London performer with growth of 1.8%, a ranking of 175th.

Labour

More data from the ONS showed unemployment in the capital was 10,000 higher at 234,000 between February and April; the uplift of 0.2% took the rate to 4.6%. Despite narrowing the gap with the West Midlands (4.8%), at 5.2% the North East was still the highest; Northern Ireland had the lowest rate of 2.3%, with the UK rate at 3.9%.

The South East had the highest employment rate again at 79.5% which compared with 76.4% in London where 4.8m are employed; the UK rate was 76.4%.

Public sector employment in London increased by 1.4% in March to 746.000, which was 13.9% of the workforce. At 25.2% Northern Ireland had the highest level of public sector employment, London was the lowest.

In March, average earnings in London increased by £41 to £847 per week. London had the highest average earnings with the lowest recorded in Northern Ireland at £537.

Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

In the UK overall, average earnings grew by 1.7% or by 0.4% after inflation. If bonuses are included real pay fell by 0.4%.

The public sector saw the highest estimated growth, at 3.2% for regular pay, while negative growth was seen in the construction sector, estimated at negative 1.8%. Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay.

Housing

Estimates of private sector rents for the year to March 2020 were published by the ONS this month.

The median monthly rent was an all time high of £700 in England between 1 April 2019 and 31 March 2020. London had the highest median monthly rent at £1,425 with the North East the lowest at £495. Within local authorities the difference in monthly rental price between the most and least expensive was nearly £2,100.

In London rental prices ranged from £1159 to £1,841 with £1425 the median.

Data for the 12 months to May 2020 showed private rental prices paid by tenants in the UK rose by 1.5%, unchanged from the previous month. Rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland.

Rental prices increased the most in the South West, up by 2.5%, with the lowest price growth in the North East at 0.8%, London recorded 1.2%.

According to the ONS the South West is also projected to have the highest regional rate of growth in households over the next ten years, at 9%. This compares with 7.8% in London and 4.3% in the NE (the lowest).

Overall the number of households in England is projected to increase by 1.6m (7.1%) from 23.2m in 2018 to 24.8m in 2028. London is forecast to have 3.8m households by 2028.

Given the closure of the housing market following lockdown the ONS has suspended its property price index until further notice.

At -2.2% the capital’s economy shrinks faster than most other regions following lockdown but pre-pandemic data shows earlier growth of 5%

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A quarterly nowcast for London for the 3 months ended March 2020 which captures the start of lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the London economy contracted by 2.2%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked London ninth and suggests the capital’s economy has so far coped poorly with the pandemic relative to the other eleven ‘regions’ of the UK. Over the same period the East Midlands was ‘best’ with a fall of 1% with Northern Ireland’s 3.9% contraction the ‘worst’; the UK decline was 2%.

For the 12 months ended March 2020 on a rolling 4 quarter basis, ESCoE has estimated that the capital’s growth has dropped from 3.3% to 1.8%.

This ranked London first (previous ranking also top) and suggests the city has held its position relative to the other eleven parts of the UK. Over the same period UK growth was 0.5%; growth in the East of England (ranked second) was 1.4%; and growth in the East Midlands (ranked twelfth) was -0.6%.

ONS GDP to September 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil show the capital staying top relative to other parts of the UK. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fourth estimate for London, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended September 2019 with the same quarter a year earlier. These showed London grew by 5%, a deterioration of 0.3% on the previous quarter. This placed London top (previous ranking also first) out of the twelve UK ‘regions’.

London’s growth of 5% compared with UK growth over the same period at 1.2%. The West Midlands was the worst performer and contracted by 1.5%. The East of England and the North West were the other two ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures also highlighted that the standalone quarter to September 2019 showed an improving picture in London with the data better than the previous quarter. London’s economy grew by 1.4% in July to September 2019, following growth of 1.2% in April to June 2019.

This placed London first (previous ranking also top) out of the twelve UK ‘regions. Four regions of the UK saw their economies contract but overall the UK grew by 0.5%.

The North East of England was second with quarterly growth of 1.3% whilst the North West and Northern Ireland contracted by 0.2%, with the East Midlands posting a drop of 0.3%.

In this period, London’s best sector was education with growth of 8% but mining fell by 16.7%. Overall production grew by 3.3%, services by 1.5% and agriculture by 2.5% but construction fell by 1%.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the capital was 27,000 higher at 239,000 between January and March; the uplift of 0.4% took the rate to 4.7%. At 5.4% the North East was the highest; Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80.2% which compared with 76.9% in London where 4.9m were employed; the UK rate was 76.6%.

Housing

The capital’s average property price increased by 1.2% over the month to £485,794. The uplift took the annual increase to 4.7%, the highest in the UK. In comparison, UK prices dropped by 0.2% to £231,855 during March, an annual growth rate of 2.1%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the March figures will therefore reflect those completions that occurred before lockdown.

Given the closure of the housing market following lockdown the ONS has suspended its index until further notice.

A significant uplift in the capital’s exports and the City imports £14.5bn of services compared with £219m in Barnet

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HMRC has published the latest regional trade figures which show exports and imports for 2019. Given the time period this data reflects Brexit uncertainty rather than Covid 19 turmoil. 

In the year to December 2019, the overall value of UK trade in goods exports increased by 2.1% to £346bn compared with the same period in 2018. The overall value of imports increased by 0.3% to £483bn.

There was an increase in the annual export value in London along with five of the 12 UK ‘regions’. The capital’s exports increased by 17.2% or £6bn to £44bn which was 13% of the UK total.  

The leading regional exporter remained the SE with £46bn with Northern Ireland the smallest at £9bn. The best performer in percentage terms was London, with Yorkshire & The Humber falling by 6.3%.

There was an increase in the annual import value in London along with five of the 12 UK ‘regions’. The capital’s imports increased by 12% or 8bn to £73bn which was 15% of the UK total.

The biggest regional importer was the SE at £98bn and Northern Ireland was the smallest at £8bn. In percentage terms London added 12% compared with Scotland which reduced imports by 7%.

The USA was London’s largest export market with miscellaneous manufactured articles the best export. Most of the capital’s imported goods came from China with machinery and transport equipment the biggest import.

Services

This month the ONS published data on regional services imports for 2017. The biggest component of services imported into the UK was £51bn of travel. This was 28% of the £181bn UK total imports of services.

London imported £60bn of services value in 2017 of which £15bn was finance activities. The biggest importer of services was London with Northern Ireland importing £1.6bn.

At a local level, the largest importer of non-travel services into the UK was Camden and City of London at £14.5bn, almost double the next largest importer which was Westminster at £7.9bn. Of the 167 local areas, the Western Isles of Scotland imported the least amount, £21m, with Anglesey next at £31m.

As stated above, in the capital the City imported £14.5bn of non-travel services compared with £219m in Barnet.

The data on services exports was released by the ONS last year which showed London exporting £117bn of services which compared with Northern Ireland at £2.9bn.

Other data

The ONS has also published the latest regional construction sector data to December 2019 which again reflects Brexit uncertainty rather than Covid 19 turmoil. Compared with the previous quarter all parts of the UK recorded a decline with London posting a 1.8% drop to £9bn.

The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with a 0.9% fall. Within construction though 6540 new houses were completed in the capital, an increase of 20% on the previous quarter.

More pre-pandemic data from the ONS showed unemployment in the capital was 12,000 higher at 218,000 between December and February; the uplift of 0.2% took the rate to 4.5%. Northern Ireland had the lowest rate of 2.5% with the NE the highest at 5.6%, the UK rate was 4%.

The South East had the highest employment rate at 80.1% which compared with 76.7% in London where 4.7m are employed; the UK rate was 76.6%.

London’s average property price increased over the month by 0.2% to £476,972. The uplift took the annual increase to 2.3%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.

Highgate and Edmonton are the wealthiest and poorest areas of the capital, productivity in London is high but the city’s productivity growth is very mixed

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The ONS has published average household disposal income estimates for England and Wales in 2018. The incomes shown are after tax and housing costs are taken off.  The analysis has shown that 87% of local areas had an average household income of between £22,500 and £39,200; within this over a third were between £28,000 and £33,600.

Of the 50 areas with the highest total incomes, 41 were in London, with the lowest incomes more widely spread geographically across England and Wales. The North East, East England, London, and the South East had no local areas in the bottom 50.

The wealthiest area in England and Wales was Mickleover in Derby with incomes of £52,200 and the poorest was Highfield North in Leicester with £12,500. The two areas are 30 miles from each other and ranked 7200 places apart.

The wealthiest area of the capital, which just pipped Kensington and Chelsea, was Highgate, with £51,600. This ranked the area 2nd out of the 7,201 areas recorded. The poorest area of London was the Edmonton area of Enfield with £18,300. This area was ranked 6,949 out of the 7,201 areas recorded.

Unlike most regions of the UK, output per hour in the capital is way above the UK average. Productivity in London was 32% above the norm which unsurprisingly ranked the city top in the UK. The SE and London record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions fall below it.

The ONS has now released data for a longer period and at a subregional level. This gives further insight into London’s performance.

Perhaps the most useful is the 2018 results for the 44 enterprise regions in the UK which comprise the 38 English local enterprise partnerships (LEPs) and six enterprise regions in Scotland, Wales and the border regions.

The SE’s Thames Valley Berkshire LEP had the best productivity (in terms of hours and jobs) in 2018 at 35% above the UK average whereas the West Midland’s Black Country LEP at 24% below was the worst.

Eight of the 44 enterprise regions in the UK recorded productivity above the UK average; at +32%, London’s LEP was ranked second.

In terms of productivity growth between 2010 and 2018 the Coventry and Warwickshire LEP was top with growth of 16%. Twelve economic regions recorded productivity levels lower in 2018 than 2010. The worst performer was the SE’s Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

Productivity growth in the capital was +1.4%, which ranked London 28th.

All of the capital’s five subregions recorded productivity above the UK average. Inner London – West was top with +48%, with Outer London – East bottom in the city with +12%.

On districts, led by Tower Hamlets (+75%), nineteen of the London’s economic regions recorded productivity above the UK average. Only two dropped below the UK average, with Hackney and Newham recording the lowest productivity at -6%.

The growth in hours between 2010 and 2018 in Inner London – East was 37%, beating the capital’s other subregions, with Outer London – West and North West the lowest, recording 16%. In UK terms these levels of growth were in the top ten of the country’s 41 subregions.

If the increase in economic output is also factored in, then the sub regional performances are mixed. Outer London – West and North West was ranked 1st in the UK with growth of 12%, Inner London – West was placed 10th with growth of 10% and Outer London South was 26th with grown of 2%. In comparison, Outer London – East and North East was ranked 40th, only beating Inner London – East, which saw productivity decline by 10%, the most in the UK.

More data from the ONS showed unemployment in the capital was 3,000 higher at 224,000 between November and January; the slight uplift left the overall rate unchanged at 4.5%. Northern Ireland had the lowest rate of 2.4%, with the North East the highest at 6.2%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80% which compared with 76% in London where 4.8m are employed; the UK rate was 76.5%.

London’s average property price decreased by 1.1% to £476,588, which took the annual increase to 1.4%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

London top of the UK growth, productivity and earnings rankings but surprisingly productivity growth is slower than Scotland

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the capital’s growth has increased from 2.3% to 3.3%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked London first (previous ranking also first) and suggests the capital has retained its top position relative to the other eleven parts of the UK. Over the same period UK growth was 1.4% and growth in the East Midlands (ranked twelfth) was 0.1%.

The latest official ONS figures for an earlier period are similar. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for London the other eight English regions, and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed London grew by 4.5%, up from 4.2% growth the previous quarter. This maintained the capital’s first place out of the twelve UK ‘regions.’

UK growth over the same period was 1.4%. The NW was the worst performer and contracted by 0.7%, one of three ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was poorer for the capital than the previous quarter. London’s economy grew by 1% in April to June 2019, following growth of 1.6% in January to March 2019.

In this period, the star performers in London were the wholesale/retail trade and finance industries which grew by 5.2% and 4.7% but the transportation/storage industry fell by 3.5%.

Overall the services, agriculture and production sectors grew by 1.1%, 0.6% and 0.3% respectively but the construction sector fell by 1.7%. London has experienced strong growth in the production sector relative to 2017 while construction has continued to fall since Quarter 3 (July to Sept) 2017.

Productivity

Unlike most regions of the UK, output per hour in London was above the UK average. Productivity in the capital was 31.6% above the norm which was the best in the UK.

London was one of two regions that had productivity above the UK average in 2018; the other was the SE at +9.1%. These regions record high levels of hours worked and their elevated productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

London was also first in the rankings in terms of output per job. The capital’s 40.5% compared with Wales at -18.2%.

In terms of growth in output per hour, six regions of the UK expanded. London was ranked sixth as output per hour grew by 0.5%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK average growth was 0.5%.

Sectorally, productivity in non-manufacturing production and agriculture was better than expected but manufacturing disappointed.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.

Labour

More data from the ONS showed unemployment in the capital fell by 10,000 to 213,000 between October and December; the drop of 0.3% took the overall rate to 4.3%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.1% which compared with 75.5% or 4.8m in employment in the capital; the UK rate was 76.5%.

In December, average earnings in London fell by £25 to £805 per week the highest in the UK; the lowest average earnings of £530 were recorded in the NE.

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.

Housing

London’s average property price increased by 1.6% over the month to £483,922; the uplift took the annual increase to 2.3%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

London continues to bankroll the UK, house prices still stalled and London Power launched

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, London had a surplus of £38.8bn, the biggest in the UK and a larger surplus than the £33bn recorded in 2018.

On a per person basis, London’s surplus was £4,369, higher than the £3,752 recorded in 2018. This was the largest per person surplus in the UK whereas Northern Ireland had the biggest shortfall at £4,978.

The capital was one of three areas of the UK to run surpluses, along with the SE and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; the other seven regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in London was £123bn or £13,826 per head, an increase on the 2018 figure of £121.8bn. This was the biggest spend in the UK; Northern Ireland had the lowest at £27.9bn or £14,821 per head. Total government spending was £853bn or £12,835 per head.

London collected £162bn in taxes in 2019, the largest contribution to the Exchequer, this compared with the lowest contribution of £18.5bn which was from Northern Ireland. Overall the state raised £811.3bn or £12,213 per head in taxes, an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in London fell by 11,000 to 214,000 between September and November 2019; the drop of 0.3% took the overall rate to 4.3%, still the joint second highest in the UK. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%.

The South West continued to have the highest employment rate at 79.8% which compared with 75.6% in London. The UK employment rate was 76.3%.

London average property prices fell by 0.5% during November 2019, the drop to £475,458, reduced annual growth to 0.2%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

Away from the stats, staff costs at City Hall under Boris Johnson’s final budget for 2016-17 were £36m, while the proposed budget for 2020-21 under Sadiq Khan proposes £65.5m. Headcount has risen during the four-year period from 897 in 2016 to a proposed 1,300 by 2021.

A spokesperson for the mayor said extra responsibilities which have been devolved to the mayor will mean more costs. Opponents of Mr Khan suggest bureaucratic inefficiencies.

Mr Khan has had to deal with Brexit uncertainty but Mr Johnson had to guide the capital’s economy post-financial crash. It’s still too early to gauge which mayor will have the best record on London’s economy, but increasing the number of bureaucrats and economic growth tend not to go hand in hand.

A new energy supplier for London, backed by City Hall, has been launched. London Power is not a London Assembly owned business although the exact details of the deal between the Mayor and Octopus Energy are not known.

Highlighting the problems which can occur when the state gets involved in energy businesses, Bristol City Council owned Bristol Energy lost c£10m last year. Bristol Energy was set up in 2016 to provide ethically sourced, low-cost power and return a profit for Bristol taxpayers; instead the venture has so far soaked up £37m of public funds. Nottingham council owned Robin Hood Energy has likewise required taxpayer bailouts.

The objectives of London Power are to keep energy bills low rather than make a profit. If any profit is made, City Hall will invest this into community projects. 

On jobs, Facebook will create 1,000 new roles in London over the course of 2020.  Most jobs will be technology-focused, with roles in software engineering, product design and data science. It will take Facebook’s UK workforce to c4,000.

The firm has decided to invest more in policing online content so most of the new roles will be in Facebook’s ‘community integrity’ team, which designs tools to monitor posts on Facebook’s platforms including Messenger, Instagram and WhatsApp.

London tops the 2018 growth league, Hounslow and Richmond sees the highest regional growth, Lambeth declines and house prices continue to fall the most in the UK

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Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its 2018 full year estimate of economic activity by UK country, region and local area using gross domestic product.

The figures showed the London economy grew by 2.0% in 2018, up from the 2017 growth rate of 1.6%. This placed the capital first (2017 ranking seventh) out of the twelve UK ‘regions.’

The UK and England growth rate in 2018 was 1.4%. Growth in Wales was 1.3%, Scotland grew by 0.9% and the Northern Ireland economy shrank by 0.5%.

Within the city, the Hounslow and Richmond economy grew the fastest at 6.1%, followed by Bromley at 4.7% and Kensington, Chelsea, Fulham and Hammersmith at 4.2%. Across the UK, the highest annual growth of the 179 local areas was in Falkirk at 10.5%.

Six areas of the capital saw their GDP decline in 2018. Lambeth recorded the biggest drop at 5.8%, followed by Harrow and Hillingdon at 1.7% and Bexley and Greenwich at 1.5%. In UK terms, the lowest annual growth of sub national areas was in Mid and East Antrim at -10.1%.

GDP per head growth of 5.4% to £61,899 was seen in Hounslow and Richmond although at £395,309 Camden and the City of London was top in the capital. GDP per head fell by 6.3% in Lambeth to £40,870.

In terms of UK extremes, GDP per head in Camden and the City of London was top and six areas of London were in the UK top 10. The lowest in the UK was £15,034 in Ards and North Down. These figures are a guide and are influenced by commuter flows.

In 2018, key drivers of the London economy were mining and quarrying 6.2%, professional/scientific/technical activities at 6.1% and wholesale/retail up by 4.1%. Those areas that did not perform well were water supply services down by 9%, transportation and storage 3% and arts/entertainment declined by 1%. Overall the services sector grew by 2.4% whilst construction fell by 0.6% and production by 3.9%.

The 2018 performance of the capital’s enterprise partnership was also highlighted by the ONS. Of the UK’s 45 development bodies, the London Enterprise Panel was eleventh in the UK (2017 ranking 26th) with growth of 2.0%.

More data from the ONS showed unemployment in London dropped by 4,000 to 221,000 between August and October 2019; the drop of 0.1% took the overall rate to 4.5%, the second highest rate in the UK.  Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.8% which compared with 74.8% in London. The UK rate was 76.2%.

The capital’s average property price fell by 1.7% during October 2019 to £472,232, which took the annual fall to 1.6%, the biggest drop in the UK. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

The Capital’s economy tops the ‘regional’ growth rankings but unemployment is the joint second highest in the UK, and house prices continue to fall

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On transport, the deputy chair of the HS2 review panel and critic of the project, Lord Berkeley, says he has been given no opportunity to influence the final HS2 report. Lord Berkeley, a civil engineer who worked on the construction of the Channel Tunnel, was appointed when Transport Secretary, Grant Shapps, launched the review in August.

The Department for Transport would not confirm when the Oakervee review will be published, but it seems likely that this will now be after the election.

The new £88bn HS2 railway line would run from London to the West Midlands, Manchester and Leeds. Trains on the London to Birmingham route would be 400m-long, have up to 1,100 seats and would be capable of reaching speeds of up to 250mph. They would travel as many as 14 times per hour in each direction and cut London to Birmingham journey times from one hour 21 minutes to 52 minutes.

Also on rail, figures released by Virgin Trains show more people travelling between London and Glasgow by rail rather than air. The record level was driven by a 6% year-on-year increase in the number of passengers travelling, c718,000, up from c244,000 a decade ago.

FirstGroup and Italian firm Trenitalia, are to take over the running of the route from December, replacing Virgin, which was barred from bidding. In the latest National Rail Passenger Survey, of the 25 operators in the country, Virgin was ranked second.

Also on the trains, Crossrail will be delayed until 2021 and Europe’s biggest infrastructure scheme is set to go another £650m over budget. The route, to be known as the Elizabeth Line, was originally due to open in December 2018. The cost of the project could reach £18.25bn, more than £2bn over the original budget.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its latest estimates for London, the other eight English regions, and Wales, for the year to March 2019. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

The figures showed London’s economy annually grew by 4.2%, up from 2.3% the previous quarter. This placed the capital top (previously fourth) out of the twelve UK ‘regions’ with Yorkshire and The Humber bottom at -0.3%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also showed that growth in London’s economy accelerated in the quarter to March 2019. The capital’s economy grew by 1.2% in January to March 2019, following a contraction of 0.1% in October to December 2018.

In this period, the finance industry grew by 1.9% and made the largest positive contribution to growth whereas the manufacturing industry fell by 2.2%. Overall, the service sector added to growth whereas output in the production sector contracted.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked London top (previous ranking also first) with growth of 2.3%, which suggests the ‘region’ has had a good summer relative to other parts of the UK.

Using this metric, UK growth was 1.45%, which compared with growth in the South West of England (bottom) at 0.41%

More data from the that ONS showed there was no change in unemployment in the capital which remained at 222,000 between July and September; an overall rate of 4.5%, the second highest in the UK. Northern Ireland had the lowest rate of 2.5%, with the UK rate at 3.8%. The highest rate was 5.9% which was recorded in the North East.

The South West had the highest employment rate at 81.0% which compared with 74.6% in London; the UK rate was 76.0%.

In September, average earnings in the capital were down by a pound to £830 per week, this was the highest average earnings in the UK. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

London’s average property price fell by 0.1% over the month to £474,601, which took the annual decrease to 0.4%, the biggest drop in the UK.  In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%

Londoners are happier than they were but are still the most miserable in the UK, the importance of creative industries to the capital and the wider UK economy highlighted

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Unemployment in London increased by 17,000 to 225,000 between June and August, the uplift of 0.4% took the overall rate to 4.6%, the second highest in the UK.

The South West continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East.

The South West also had the highest employment rate at 81.0% which compared with 74.2% in London. UK employment was estimated at 75.9%.

London average property prices fell by 1.3% to £472,753, this took the annual decrease to 1.4% which was still the biggest drop in the UK. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

The ONS’s Personal Well-being (or Happiness) Index has ranked London top out of the 12 UK ‘regions’ in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

Research by the London Chamber of Commerce has indicated firms continue to have problems recruiting staff and that one in three companies are seeing increased wage demands.

More positively, the survey of more than 500 firms also found around one in five reported an increase in exports, domestic orders and sales in recent months.

Growth in London was 2.3% in the year to June 2019 according to the latest estimates from ESCoE, the best performance nationally (out of twelve UK ‘regions’)

Business investment is also up but the Chamber warned this may be as part of Brexit preparation spending, rather than the underlying strength of the economy. The Extinction Rebellion protests will also impose some economic drag on the capital’s economy.

This month the World Trade Organisation gave the US permission to impose taxes on £5.8bn of goods it imports from the EU. It is part of the US response to EU subsidies given to planemaker Airbus.

Consequently every Savile Row suit sold to the US faces a new export tax of 25%. As well as men’s woollen suits, cashmere knitwear and malt Scotch whisky are also hit.

To a degree the weak pound and the number of US visitors coming to London to shop for luxury goods should mitigate against the new tariff.

Large areas of London will be upgraded from copper cables to full fibre optics using the Tube network and public buildings. New fibre optic cabling will be laid along TfL tunnels to create a ‘fibre backbone’ across London.

The £10m of funding to subsidise the cost to providers of laying cabling will come from City Hall’s Strategic Investment Fund. The funding adds to £15.4m from London Councils for west and north London, and £8.5m for central London from the Department for Digital, Culture Media & Sport.

Insurance broker Aon is the latest financial firm to announce plans to move its parent company’s jurisdiction of incorporation to Dublin due to Brexit. As with many firms though, the New York-listed insurer will keep its operational headquarters in London and its reporting requirements or listings will not change.

A GLA commissioned study has revealed London’s creative industries generate spending of £40bn per year within the supply chain. The creative industries are already known to boost London’s economy by £52bn.

The Creative Supply Chains Study found that about half of the £40bn is spent in education, architectural, engineering and computing services and that 40 per cent of suppliers are located outside of London.

Employment in the creative industries is growing four times the rate of other areas of the economy; every job in London supports an additional 0.75 of a job across the supply chain. In total, 267,500 people are working in the industry in London.

The provision of affordable workspace and ensuring businesses can work together in clusters is an issue highlighted in the report. Six Creative Enterprise Zones across the capital to help create jobs, training opportunities and affordable workspace will be created.

Transport

CBI London, West Midlands, East Midlands, Yorkshire and Humber, the North East and North West regional directors have urged the government to build the HS2 rail project in full.

However, a paper by the Adam Smith Institute, also released this month, claims that HS2 will deliver limited benefits and that some direct trains from London to the North could go.

The Institute recommends instead, upgrading existing routes with new signalling, doubling the number of tracks, reopening mothballed lines, building new sections of railway and targeting bottlenecks at key junctions.

The Department for Transport’s independent review is rumoured to be considering shortening HS2 to end at Old Oak Common in north-west London rather than tunnelling into central London. Transport for London (TfL) believes ending the line at Old Oak Common would put huge pressure on Crossrail.

A new £25m fund for low income and disabled Londoners will also offer motorists up to £2,000 for scrapping any older, more polluting vehicle ahead of the planned expansion of the mayor’s Ultra Low Emission Zone up to the North and South Circular roads in 2021.

City Hall already runs a £23m fund for micro businesses, sole traders and charities wanting to scrap older vans.