The State of Britain

UK

London or the East Midlands top? The pandemic clouds regional economic performance but it is clear the North West of England wins the productivity prize

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A nowcast for the 12 months ended March 2021 which incorporates the second lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the East Midlands performed the ‘best’ with a fall of 9.4%, with Wales’s 13.4% contraction the ‘worst’. The UK overall posted -11.8% on the same measure.

Official ONS figures for an earlier period which reflects a mix of continued recovery from the first lockdown but also a slowdown from the second lockdown show London was the top UK ‘region ‘with quarterly growth of 3.1% whilst the East Midlands was bottom, posting growth of -0.8%. UK growth was 1%.

Productivity

ONS figures also showed that in 2020, output per hour worked increased by 4.6% in the NW which ranked the region top out of the 12 UK ‘regions and fell the most in the West Midlands, decreasing by 1.4%. Output per hour worked in the UK overall increased by 0.4%.

Research and Development

UK R&D spend rose by £1.3bn (3.4%) to £38.5bn in 2019 – the lowest percentage growth since 2013. Most R&D expenditure was in the business sector at £25.9bn (67% of the UK total), followed by the higher education sector at £9.1bn (24%).

Total R&D expenditure represented 1.74% of GDP in 2019; compared with 1.59% in 2008 and 1.72% in 2018. Overseas funding increased by 4.1% to £5.6bn in 2019 compared with 2018; this was 0.8% higher than the peak in 2014 of £5.5bn.

The South East did best and secured £7.5bn of R&D expenditure with the North East only attracting £0.7bn.

UK stats

GDP

ONS stats for the UK as a whole are more recent than those shown at the regional level above.  UK GDP fell by 1.6% in the three months to March 2021. Over that quarter, services fell by 2.1%, with construction up by 2.3% and production down by 0.5%.

Overall GDP has fallen by 8.8% from its pre-pandemic level. Growth in the month of May 2021 was 0.8%.

Overseas, according to Eurostat, GDP decreased by 0.1% in the EU27 during the first quarter of 2021. This meant that annually GDP fell by 1.2% in the EU.

Over that quarter the data showed that the German economy fell by 1.8%, France by 0.1%, with Italy at +0.1%. Annually, Germany contracted by 3.1% and France grew by 1.2% with a 0.8% decline recorded in Italy.

Labour

The UK labour market, supported by the Job Retention Scheme, saw the level of employment at 31.2m in May 2021 and the level of unemployment fall to 1.6m or 4.8%.

The EU27 unemployment rate was at 7.3%. The lowest unemployment rate in May 2021 was 3.3% in both the Czech Republic/Netherlands and the highest was 15.4% in Greece.

Inflation

UK inflation was 2.4% in June 2021 with European Union inflation at 2.2%.

Debt

The UK public sector deficit in June 2021 was £22.8n, £5.5bn less than in June 2020. Debt at the end of June 2021 was £2,218bn which was 99.7% of GDP, the highest ratio since March 1961. EU debt is 98% of GDP.

The South West pulls out of the first Lockdown the best whilst the West Midlands hit the hardest

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Official ONS figures which reflect the economy opening up after the first lockdown show each regions performance relative to other parts of the UK.

These stats compare GDP in the quarter ended September 2020 with the same quarter a year earlier. Northern Ireland topped the table with growth of -2.9% whilst UK growth over the same period was -7.5%. The West Midlands was bottom, posting growth of -11.3%.

In the same report, the ONS’s figures for the standalone quarter to September 2020 showed the South West was top with quarterly growth of 19.9% whilst London was bottom, posting growth of 13.3%; UK growth was 16.9%.

UK stats

Stats for the UK as a whole are more recent.  UK GDP fell by 1.5% in the three months to March 2021 with GDP growth of 2.1% in March itself. Over the quarter, services fell by 2%, with construction up by 2.6% and production down by 0.4%. GDP has fallen by 8.7% from its pre-pandemic level.

According to Eurostat, GDP decreased by 0.1% in the EU27 during the first quarter of 2021. This meant that annually GDP fell by 1.2% in the EU.

Over the quarter the data showed that the German economy fell by 1.8%, France by 0.1%, with Italy at +0.1%. Annually, Germany contracted by 3.1% and France grew by 1.2% with a 0.8% decline recorded in Italy.

The UK labour market, supported by the Job Retention Scheme, saw the level of employment increase to 31.2m and the level of unemployment fall to 1.6m or 4.8%.

The EU27 rate was at 7.3%. The lowest unemployment rate in April 2021 was 3.1% in Poland and the highest was 15.8% in Greece.

UK inflation was 1.6% in April 2021 with European Union inflation at 2%.

The UK public sector deficit in April 2021 was £31.7bn, £15.6bn less than in April 2020. Debt at the end of April 2021 was £2,171bn which was 98.5% of GDP, the highest ratio since the 99.5% recorded in March 1962.

Despite being severely impacted by the pandemic estimates suggest the East of England outperforms all other regions over 5 years and public debt hovers around 100% of GDP

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A nowcast for the UK ‘regions’ for the 12 months ended December 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the East Midlands was ‘best’ with a fall of 8.9%, with London’s 12.9% contraction the ‘worst’.

ESCoE also gave estimates of regional growth over a longer period. Despite experiencing some of the largest declines in activity in 2020, London, the East of England and the West Midlands have outperformed other regions over the five years to 2020. The North East of England’s weak economic performance over this period is an outlier with the devolved parts of the UK putting in middling to poor performances.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, 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 March 2020

Official ONS figures for an earlier period which reflects the start of the Covid 19 turmoil show each regions performance relative to other parts of the UK.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended June 2020 with the same quarter a year earlier. These showed London topped the table with growth of -16.3% whilst UK growth over the same period was -20.7%. The West Midlands was the worst performer and grew by -24.7%.

In the same report, the ONS’s figures for the standalone quarter to June 2020 showed Northern Ireland was top with quarterly growth of -13.6% whilst the West Midlands was bottom, posting growth of -21%.

UK stats

Stats for the UK as a whole are more recent.  UK GDP grew by 1% in the three months to December 2020 with GDP growth of to 1.2% in December itself. Over the quarter, services were up by 0.6%, construction up by 4.6% and production was up by 1.8%. Annually GDP has fallen by 7.8%.

According to Eurostat, GDP decreased by 0.6% in the euro area and by 0.4% in the EU27 during the third quarter of 2020. This meant that annually GDP fell by 6.8% in the euro area and by 6.4% in the EU27.

Over the quarter the data showed that the German economy grew by 0.1%, France by -1.3%, with Italy at -2%. Annually, Germany contracted by 3.9% and France by 5% with a 6.6% decline recorded in Italy. The Swedish economy grew by 0.5% over the quarter which meant an annual contraction of 2.5%.

The UK labour market, supported by the Job Retention Scheme, is deteriorating, with the level of employment falling by 541,000 to 32.39m and the level of unemployment rising to 1.74m or 5.1%.

The euro area unemployment rate was 8.3% in December 2020, with the EU27 rate at 7.5%. The lowest unemployment rate in October 2020 was 3.1% in the Czech Republic and the highest was 16.7% in Greece.

UK inflation was 0.9% in January 2021 with Euro area annual inflation at 0.9% and European Union annual inflation at 1.2%.

The UK public sector deficit in January 2021 was £8.8bn, £18.4bn more than in January 2020. Debt at the end of October 2020 was £2114bn which was 97.9% of GDP.

Northern economies contract the most and UK debt exceeds 104% of GDP

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A nowcast for the UK ‘regions’ for the 12 months ended September 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the North East was ‘best’ with a fall of 6.5%, with Wales’s 11.4% contraction the ‘worst’; the UK decline according to these figures was c8%.

However, the total percentage change in each region’s GDP relative to the end of 2019 has the East of England ‘best’ at -4% compared with -8% across the UK, and about -16% in the North East.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, 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 March 2020

Official ONS figures for an earlier period which reflects the start of the Covid 19 turmoil show each regions performance relative to other parts of the UK.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended March 2020 with the same quarter a year earlier. These showed London topped the table with growth of 1.5% whilst UK growth over the same period was -2.2%. The West Midlands was the worst performer and grew by -5.3%. London was the only region to show positive growth.

In the same report, the ONS’s figures for the standalone quarter to March 2020 showed no region recorded positive growth. London was top with quarterly growth of -1.5% whilst Northern Ireland was bottom, posting growth of -4.5%.

UK stats

UK GDP grew by +15.5% in the three months to September 2020 with GDP growth slowing to 1.1% in September itself. Over the quarter, services were up by 14.2%, construction up by 41% and production was up by 14.3%. Annually GDP has fallen by 9.6%.

According to Eurostat, GDP increased by 12.6% in the euro area and by 11.6% in the EU27 during the third quarter of 2020. This meant that annually GDP fell by 4.4% in the euro area and by 4.3% in the EU27.

Key European economies came out of lockdown earlier than the UK and are recovering more quickly. Over the quarter the data showed that the German economy grew by 8.2%, France by 18.2%, with Italy up by 16.1%. Annually, Germany contracted by 4.2% and France by 4.3% with a 4.7% decline recorded in Italy. The Swedish economy grew by 4.3% over the quarter which meant an annual contraction of 3.5%.

The UK labour market, supported by the Job Retention Scheme, is deteriorating, with the level of employment falling by 164,000 to 32.51m and the level of unemployment rising by 243,000 to 1.62m or 4.8%.

The euro area unemployment rate was 8.4% in October 2020, with the EU27 rate at 7.6%. The lowest unemployment rate in October 2020 was 2.9% in the Czech Republic and the highest was 16.8% in Greece.

UK inflation was 0.7% in October 2020 with Euro area annual inflation at -0.3% and European Union annual inflation at 0.3%.

The UK public sector deficit in October was £22.3bn, £10.8bn more than in October 2019. Debt at the end of October 2020 was £2,076bn which was 104.7% of GDP.

The economies of the devolved nations and London contract the quickest and UK debt exceeds 2 trillion for the first time

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A nowcast for the UK ‘regions’ for the 12 months ended June 2020 on a rolling 4 quarter basis has been published by the Economic Statistic Centre of Excellence (‘ESCoE’).

Over the period the East Midlands was ‘best’ with a fall of 4.5%, with London’s contraction the ‘worst’ at 7.4%; the UK’s decline according to the Office for National Statistics (‘ONS’) figures was 5.3%. Wales contracted by 6.8%, Northern Ireland fell by 6.7% and Scotland declined by 6.1%

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 six months earlier, the year to December 2019, which reflects Brexit uncertainty rather than Covid 19 turmoil, show London again topping the table with growth of 5% 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 South West of England was top with quarterly growth of 0.8% whilst the North East was bottom, posting a drop of 1.3%.

UK stats

UK GDP fell by 20.4% in the three months to June 2020 although GDP grew by 8.7% in June itself. Over the quarter, services were down by 19.9% (Q1 -2.3%), construction fell by 35% (Q1 -1.7%) and production was down by 16.9% (Q1 -1.5%).  

Household consumption fell by 23.1%, the biggest drop on record. Annually GDP fell by 21.7% which took the size of the economy back to 2003.

According to Eurostat, GDP fell by 12.1% in the euro area and by 11.7% in the EU27 during the second quarter of 2020. This meant that annually GDP fell by 15% in the euro area and by 14.1% in the EU27.

Key European economies came out of lockdown earlier than the UK and are recovering more quickly. Over the quarter the data showed that the German economy fell by 10.1%, France contracted by 13.8%, with Italy shrinking by 12.4%. Annually, Germany contracted by 11.7% and France by 19% with a 17.3% decline recorded in Italy. The Swedish economy contracted by 8.6% over the quarter which meant an annual contraction of 8.6%.

The UK labour market, supported by the Job Retention Scheme, does not yet reflect lockdown and was largely unchanged, with the level of employment falling by 220,000 to 32.92m and the level of unemployment stable at 1.34m or 3.9%.

Vacancies are showing increases in the latest period, driven by smaller businesses, some of which are reporting taking on additional staff to meet COVID-19 guidelines, but the Claimant Count reached 2.7m in July 2020, an increase of 116.8% since March 2020.

The euro area unemployment rate was 7.8% in June 2020, with the EU27 rate at 7.1%. The lowest unemployment rate in June 2020 was 2.6% in the Czech Republic and the highest was 15.6% in Spain.

UK inflation was 1% in July 2020 up from 0.6% in June. Key upward contributions came clothing, rising prices at the petrol pump, and furniture and household goods.

Euro area annual inflation was 0.4% in July, down from 0.3% in June. European Union annual inflation was 0.9% in July 2020, up from 0.8% in June. A year earlier, the Euro area rate was 1%.

The UK public sector deficit in July was £26.7bn, £28.3bn more than in July 2019, the fourth highest borrowing in any month on record (records began in 1993). Debt at the end of July 2020 was £2,004bn which was 100.5% of GDP, an increase of £227.6bn or 20.4% on July 2019; this is the first time debt has exceeded £2 trillion. 

UK GDP biggest drop ever and debt just short of 2 trillion as the furlough scheme constrains unemployment; 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 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.

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

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

Separate data on earnings showed London had the highest average of £847 and the lowest average of £537 was recorded in Northern Ireland. Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

UK stats

The UK public sector deficit in May was £55.2bn, £49.6n more than in May 2019, the highest borrowing in any month since records began. Debt at the end of May 2020 was £1,950bn which was 100.9% of GDP, an increase of £173bn or 20.5% on May 2019; the largest year-on-year increase in debt as a percentage of GDP since monthly records began in March 1993. This is the first time that debt as a percentage of GDP has exceeded 100% since the financial year ending March 1963.

UK GDP fell by 10.4% in the three months to April 2020 with GDP declining by 20.4% in April itself. Over the quarter, services were down by 9.9% construction fell by 18.2% and production was down by 9.5%.  Year on year the contraction was 1.7%.

The drop in GDP is the biggest the UK has ever seen, more than three times larger than in March and almost ten times larger than the steepest pre-covid-19 fall. In April the economy was c25% smaller than in February.

According to Eurostat, GDP fell by 3.6% in the euro area and by 3.2% in the EU27 during the first quarter of 2020. This meant that annually GDP fell by 3.1% in the euro area and by 2.6% in the EU27.

Key European economies are now feeling the effects of the April shutdown, with the shocking data now flowing through. Over the quarter the data showed that the German economy fell by 2.2%, France contracted by 5.3%, with Italy also shrinking by 5.3%. Annually, Germany contracted by 2.3% and France by 5.0% with a 5.4% decline recorded in Italy. The Swedish economy contracted by 0.1% over the quarter which meant annual growth was +0.4%.

Due to the furlough scheme. the UK labour market was largely unchanged in May, with the level of employment stable at 32.99m and the level of unemployment similar at 1.33m or 3.9%.

The effects of lockdown though can be seen in the vacancies figure. There were an estimated 476,000 vacancies in the UK in March to May 2020; this is 342,000 fewer than the previous quarter and 365,000 fewer than a year earlier.

The euro area unemployment rate was 7.4% in May 2020, with the EU27 rate at 6.7%. The lowest unemployment rate in May 2020 was 2.4% in the Czech Republic and the highest was 14.5% in Spain.

UK inflation was 0.5% in May 2020 down from 0.8% in April. Key downward contributions came from motor fuel with the biggest risers being food and non-alcoholic drinks.

Euro area annual inflation was 0.1% in May, down from 0.3% in April. European Union annual inflation was 0.6% in May 2020, down from 0.7% in April. A year earlier, the Euro area rate was 1.6%.

 

The economies of the devolved nations and London contract the quickest and the UK piles up debt at the fastest rate since records began in 1984

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A quarterly nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) for the 3 months ended March 2020, which captures the start of lockdown, has estimated that the contractions in the UK ‘regional’ economies ranged from -1% in the East Midlands to -3.9% in Northern Ireland; the UK decline was 2%.

On these estimates, of the 12 UK ‘ regions’ the three devolved nations fared worse than the national average as did UK powerhouse London which declined by 2.2%.

For the 12 months ended March 2020 on a rolling 4 quarter basis, ESCoE has estimated that growth in London (ranked first) was 1.8% and growth in the East Midlands (ranked twelfth) was -0.6%; over the same period UK growth was 0.5%.

ONS GDP to September 2019

Official ONS figures for six months earlier, the year to September 2019, which reflects Brexit uncertainty rather than Covid 19 turmoil, show London again topping the table with growth of 5% whilst UK growth over the same period was 1.2%. The West Midlands was the worst performer and contracted by 1.5% with the East of England and the North West of England the other two ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures also highlighted that London was top over the quarter to 2019, with growth of 1.4%. This compared with the North West, Northern Ireland and the South East contracting by 0.2% with the East Midlands posting a drop of 0.3%.

UK stats

UK GDP fell by 2% in the three months to March 2020 with GDP declining by 5.8% in March itself. Over the quarter, services were down by 1.9% (March -6.2%), construction fell by 2.1% (March -5.9%) and production was down by 2.1% (March -4.2%).  

Also household consumption fell by 1.7%, the biggest drop since December 2008. Annual growth was -1.6%, the biggest fall since Quarter 4 2009, when it also fell by 1.6%.

According to Eurostat, GDP fell by 3.8% in the euro area and by 3.3% in the EU27 during the first quarter of 2020. This meant that annually GDP fell by 3.2% in the euro area and by 2.6% in the EU27.

Key European economies are now feeling the effects of the March shutdown, with the shocking data now flowing through. Over the quarter the data showed that the German economy fell by 2.2%, France contracted by 5.8%, with Italy shrinking by 4.7%. Annually, Germany contracted by 2.3% and France by 5.4% with a 4.8% decline recorded in Italy. The Swedish economy contracted by 0.3% over the quarter which meant annual growth was +0.5%.

The UK labour market data does not yet reflect lockdown and was largely unchanged, with the pre-pandemic level of employment increasing to a joint record high of 33.14m and the level of unemployment stable at 1.35m or 3.9%.

The effects of lockdown though can be seen in the vacancies figure. There were an estimated 637,000 vacancies in the UK in February to April 2020; this is 170,000 fewer than the previous quarter and 210,000 fewer than a year earlier.

The euro area unemployment rate was 7.4% in March 2020, with the EU27 rate at 6.6%. The lowest unemployment rate in March 2020 was 2% in the Czech Republic and the highest was 16.4% in Greece.

UK inflation was 0.8% in April 2020 down from 1.5% in March. Key downward contributions came from transport (includes fuel) with the biggest risers being recreational goods.

Euro area annual inflation was 0.3% in April, down from 0.7% in March. European Union annual inflation was 0.7% in April 2020, down from 1.2% in March. A year earlier, the Euro area rate was 1.7%.

The UK public sector deficit in April was £63.5bn, £73.3bn more than in April 2019, the highest cash requirement in any month since records began in April 1984. Debt at the end of April 2020 was £1,888bn which was 97.7% of GDP, an increase of £118bn or 17.4% on April 2019; the largest year-on-year increase in debt as a percentage of GDP since monthly records began in March 1993.

Pre-pandemic data shows increased exports help Scotland and Northern Ireland record trade surpluses; the SE remains the leading regional exporter but London the best performer

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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.

The largest regional exporter remained the SE of England with £46bn of goods exported with Northern Ireland the smallest at £9bn. The best performer in percentage terms was London which was up by 17.2% with Yorkshire & The Humber falling by 6.3%.

The leading regional importer of goods was the SE of England at £98bn with Northern Ireland the smallest at £8bn.

Scotland and Northern Ireland had trading surpluses in goods of c£10bn and c£1bn; the other UK ‘regions’ all had deficits.

Services                   

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

The leading regional importer of services was London at £60bn 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.

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

UK stats

UK GDP grew by 0.1% in the three months to February 2020 but GDP declined by 0.1% in February itself. Over the quarter, services were up by 0.2% but construction fell by 0.2% and production was down by 0.6%.  Annual growth was 1.1%.

According to Eurostat, GDP fell by 3.8% in the euro area and by 3.5% in the EU27 during the first quarter of 2019. This meant that annually GDP fell by 3.3% in the euro area and by 2.7% in the EU27.

Key European economies have begun to feel the effects of the March shutdown, with the timing of the dire data varying. For example, over the quarter the data showed that pre-pandemic Germany was at a standstill but France contracted by 5.8% with Italy shrinking by 4.7%. Annually, pre-pandemic Germany grew by 0.4% but France fell 5.4% with a 4.8% decline recorded in Italy. France and Italy are already in recession due to their contractions in the previous quarter.

The UK labour market was largely unchanged, with the pre-pandemic level of employment increasing to a record high of 33m and the level of unemployment stable at 1.36m or 4%.

The euro area unemployment rate was 7.4% in March 2020, with the EU27 rate at 6.6%. The lowest unemployment rate in March 2020 was 2% in the Czech Republic and the highest was 16.3% in Greece.

UK inflation was 1.5% in March 2020 down from 1.7% in February. Key downward contributions came from motor fuels and clothing with the biggest risers being housing, water, electricity and gas.

Euro area annual inflation was 0.7% in March, down from 1.2% in February. European Union annual inflation was 1.2% in March 2020, down from 1.6% in February. A year earlier, the Euro area rate was 1.4%.

The UK public sector deficit in March was £3.1bn, £3.9bn more than in March 2019. Debt at the end of March 2020 was £1,804bn, which was 79.7% of GDP, a decrease of 1% on March 2019.

Thames Valley Berkshire LEP the most productive but the best productivity growth in Coventry and Warwickshire, the East Midlands has the wealthiest and poorest parts of the UK

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ONS figures last month demonstrated that high levels of hours worked and high productivity in London and the South East pulled up the UK average so much that the other ten ‘regions’ of the UK fell below it.

The ONS has now released data for a longer period and at a subregional level.

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.

Thames Valley Berkshire LEP had the best productivity (in terms of hours and jobs) in 2018 at 35% above the UK average whereas the Black Country LEP at 24% below was the worst. Labour productivity increased in 32 out of 44 enterprise regions in the UK between 2010 and 2018.

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 Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

The UK is divided into 168 statistical areas, of this labour productivity increased in 105. The highest productivity growth over 2010 to 2018 occurred in areas of West London followed by Warwickshire, Solihull and Milton Keynes. Tower Hamlets in London was best and had productivity 75% above the UK average whereas Powys in Wales was the worst at –43%.

The UK is also divided into 41 larger statistical areas, of these Inner London West had the highest productivity at 48% above the UK average. Four other areas of London were also in the top 10 subregions with the highest labour productivity outside London seen in Berkshire, Buckinghamshire and Oxfordshire, with labour productivity 17% above the UK average. Overall, 11 out of the 41 areas had labour productivity above the UK average.

The ONS has also 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 7201 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.

UK stats

UK GDP showed no growth in the three months to January and there was no growth in the month itself. Over the quarter, construction performed well and was up by 1.4% but production fell by 1% and services were flat. Annual growth was 1.1%.

GDP rose by 0.1% in the euro area and by 0.2% in the EU27 during the fourth quarter of 2019, according to Eurostat. Annually GDP rose by 1% in the euro area and by 1.2% in the EU27.

Key European economies remain sluggish; over the quarter Germany was at a standstill and France contracted by 0.1%, with Italy shrinking by 0.3%. Annually, Germany grew by 0.5% and France by 0.9% with 0.1% growth in Italy.

The UK labour market was largely unchanged, with the level of employment increasing to a record high of 32.99m and the level of unemployment stable at 1.34m or 3.9%.

The euro area unemployment rate was 7.4% in January 2020, with the EU27 rate at 6.6%. The lowest unemployment rate in January 2020 was 2% in the Czech Republic and the highest was 16.5% in Greece.

UK inflation was 1.7% in February 2020 down from 1.8% in January. Key downward contributions came from motor fuels, games, toys and hobbies with the biggest risers housing, water, electricity and gas.

Euro area annual inflation was 1.2% in February, down from 1.4% in January. European Union annual inflation was 1.6% in February 2020, down from 1.7% in January. A year earlier, the Euro area rate was 1.5%.

The UK public sector deficit in February was £0.3bn, £0.3bn less than in February 2019. Debt at the end of February 2020 was £1,791bn, 79.1% of GDP, a decrease of 1.1% on February 2019.

London top of the ‘regional’ leagues but Scotland takes the productivity growth crown, and regional economies more exposed to manufacturing suffer Brexit buffeting

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First, the ESCoE nowcast for the 12 months ended December 2019 on a rolling 4 quarter basis. This flagged UK growth at 1.4%, growth in London ranked top at 3.3% and growth in the East Midlands ranked last at 0.1%.

But official ONS figures for an earlier period showed the East Midlands faring better. These figures are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier.

According to these more volatile figures, the East Midlands economy grew by 1.8%, down from 2% growth which placed the East Midlands second out of the twelve UK ‘regions.’ Again London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. On these stats the North West economy was the worst performer and contracted by 0.7%, one of three regions in the UK to suffer a decline.

In the same report, there was no surprise that the ONS’s figures also highlighted that the standalone quarter to June 2019 was worse for the North West than the previous quarter. The North West economy declined by 1.6% in April to June 2019 placing the North West joint last (with the West Midlands) out of the twelve UK ‘regions.

On these figures six regions of the UK saw their economies contract as did the UK overall by 0.2%. At 1% London grew the most.

ONS productivity per hour figures had two regions above the UK average in 2018, London, +31.6% and the South East +9.1%. These regions record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

In terms of output per job, London was a bigger outlier, at 40.5% above the average. Again Wales was furthest off the average at -18.2%.

On productivity growth in output per hour, six regions of the UK expanded. At 2.3%, growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth and growth in London were both 0.5%.

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.

Also ONS earnings figures showed UK average earnings grew by 2.9% or by 1.4% after inflation. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the North East.

UK stats

UK GDP showed no growth in the three months to December although there was growth of 0.3% in the month itself. Over the quarter, construction performed well and was up by 1.5% but production fell by 0.8% and services grew by 0.1%. Annual growth was 1.1%.

GDP rose by 0.1% in both the euro area and the EU28 during the fourth quarter of 2019, according to Eurostat. Annually GDP rose by 0.9% in the euro area and by 1.1% in the EU28.

Key European economies remain sluggish; over the quarter Germany was at a standstill and France contracted by 0.1%, with Italy shrinking by 0.3%. Annually Germany grew by 0.5% and France by 0.8% with no growth in Italy.

The UK labour market was largely unchanged, with the level of employment increasing to a record high of 32.93m and the level of unemployment decreasing to 1.29m or 3.8%.

The euro area unemployment rate was 7.4% in December 2019, with the EU28 rate at 6.2%. The lowest unemployment rate in December 2019 was 2% in the Czech Republic and the highest was 16.6% in Greece.

UK inflation rate was 1.8% in January 2019, up from 1.4% in December. Key downward contributions came from furniture and furnishings, in particular settees and double beds, with the biggest risers electricity prices, fuels and lubricants, clothing and airfares.

Euro area annual inflation was 1.4% in January, up from 1.3% in December. European Union annual inflation was 1.7% in January 2020, up from 1.6% in December. A year earlier, the Euro area rate was 1.5%.

The UK public sector surplus in January was £9.8bn, £2.1bn less than in January 2019. Debt at the end of January 2020 was £1,798bn, 79.6% of GDP, a decrease of 0.7% on January 2019.