London’s economy the slowest out of the first Lockdown and the capital’s unemployment the highest in the UK

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Official ONS figures for an earlier period which reflects the economy opening up after the first lockdown show the region’s 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. These showed that London’s growth was -7.6% compared with -16.3% the previous quarter. This placed London seventh (previous ranking first) out of the twelve UK ‘regions’.

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 London post growth of 13.3% compared with -17.2% in April to June 2020.

This placed London last (previous ranking third) out of the twelve UK ‘regions’. The South West was top with quarterly growth of 19.9%; UK growth was 16.9%.

In this period, the London best sector was accommodation at 180% compared with real estate at 1.8%. Production, Construction and Services were 18%, 61% and 12%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was down 11,000 at 345,000 between January and March; this took the rate to 6.8%. At 6.8% London was the highest; the South East had the lowest rate of 3.4%, with the UK rate at 4.8%.

The South East had the highest employment rate at 78.5%, this compared with 69.1% in Northern Ireland and 74.8% in London where 5.1m are employed; the UK rate was 75.2%.

Public sector employment in London increased by 3.4% to 767,000, which was 14.5% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.5% in London which was the lowest.

In December, average earnings in London grew to £871 per week. London had the highest average earnings and the lowest average earnings of £584 were recorded in the North East and the East Midlands.

Earnings in Scotland increased the most in the UK by £37 per week whereas the biggest drop in wages was £50 in the East Midlands. The rate of annual pay growth was 4.0% for total pay and 4.6% for regular pay. In real terms, total pay is growing at a faster rate than inflation at 3.1%, with regular pay growth at 3.6%. Public sector pay grew at 5.6% compared with 3.7% in the private sector.

The public sector saw the highest estimated growth in total pay. All sectors saw positive growth, although construction (1.2%) and manufacturing (1.9%) had smaller growth than the other sectors. This is an improvement on the growth rates in April to June 2020, the three-month period with the biggest falls in average pay, when all sectors except for the public sector had negative growth rates.

Housing

The London average property price increased by 1% in March 2021 to £500,310. The uplift took the annual increase to 3.7%. In comparison, UK prices grew by 1.8% to £256,405 during March, an annual growth rate of 10.2%.

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