The State of Britain

The region’s economic growth only surpassed by London after stalling in early 2019, EE productivity grows and house prices accelerate

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the EE’s growth has increased from 1.5% to 2.1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the EE second (previous ranking fifth) and suggests the region has improved relative to the other eleven parts of the UK. Over the same period UK growth was 1.4%; growth in London (ranked first) was 3.3%; and growth in the East Midlands (ranked twelfth) was 0.1%.

The latest official ONS figures for an earlier period are not so good. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the EE the other eight English regions, and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed the EE contracted by 0.1%, down from 0.1% growth the previous quarter. This placed the EE tenth (previous ranking eleventh) out of the twelve UK ‘regions.’

London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. The NW was the worst performer and contracted by 0.7%, one of three ‘regions’ (including the EE) in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was slightly better for the region than the previous quarter. The EE economy grew by 0.2% in April to June 2019, following no growth in January to March 2019.

This placed the EE sixth (previous ranking tenth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%.

In this period, the EE education industry grew by 4.8% but manufacturing fell by 1.9%.

Overall the services sector grew by 0.8%, while production, construction and agriculture fell by 2.2%, 0.6% and 0.5% respectively. The EE services sector has remained relatively flat relative to 2017 whilst production and agriculture have been more volatile with construction generally falling.


Like most regions of the UK, output per hour in the EE was below the UK average. Productivity in the EE was 4.6% under the norm which ranked the region fourth in the UK.

Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions sit below it. Wales was furthest off the average at -17.2%.

The EE was also fourth in the rankings in terms of output per job. The region’s 5.3% below the UK average compared with London at 40.5% above.

In terms of growth in output per hour, six regions of the UK expanded. The EE was ranked fifth as output per hour grew by 0.6%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.

Sectorally, construction was better than expected but finance and insurance disappointed.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.


More data from the ONS showed unemployment in the region increased by 7,000 to 108,000 between October and December; the uplift of 0.2% took the rate to 3.3%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.1% which compared with 78.6% or 3.2m in employment in the EE; the UK rate was 76.5%.

In December, average earnings in the EE fell by £16 to £668 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The EE was ranked third (previous ranking also third).

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.


The EE’s average property price increased the most in the UK by 1.3% over the month to £297,714; the uplift took the annual increase to 2.4%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.