The State of Britain

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%