The State of Britain

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.