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%.
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.