A nowcast for London 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 London economy contracted by 11.2%.
This ranked London eleventh in the UK and suggests the capital’s economy has so far coped ‘poorly’ with the pandemic relative to the other eleven UK ‘regions’ on this metric. Over the same period 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 the London GDP relative to the end of 2019 is about -7%. This compares 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 the region’s 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 that London’s growth was +1.5% compared with +5% the previous quarter. This placed London top (previous ranking top) out of the twelve UK ‘regions’.
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 London post growth of -1.5% compared with +0.5% in October to December 2019.
This placed London top (previous ranking second) out of the twelve UK ‘regions’. No region showed positive growth. Northern Ireland was bottom, posting growth of -4.5%.
In this period, London’s best sector was finance with growth of 2.6% but electricity fell by 11.3%. Production, Construction and Services were -2.9%, -4.7% and -1.4%.
Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the capital was 60,000 higher at 301,000 between July and September; the uplift of 1.2% took the rate to 6%. At 6.7% the North East was the highest; Northern Ireland had the lowest rate of 3.6%, with the UK rate at 4.8%.
The South East had the highest employment rate at 78.3%, this compared with 70.5% in Northern Ireland and 75.2% in London where 4.7m are employed; the UK rate was 75.3%.
The London average property price increased by 0.8% in September 2020 to £496,485. The uplift took the annual increase to 4.1%. In comparison, UK prices grew by 1.7% to £244,513 during September, an annual growth rate of 4.7%.