South East City Economies Still Set To Dominate By 2027

The economy in Leeds has grown faster than London’s in the three years since the Northern Powerhouse initiative was launched, according to new research.

The UK Powerhouse report, which is produced with the Centre for Economics and Business Research (Cebr), provides a quarterly estimate of GVA* and job creation within 45 UK cities 12 months ahead of the Government’s official figures.

According to the latest quarterly edition of the in-depth report, the economy of Leeds is said to have grown by 8% since the end of June 2014 when George Osborne launched the Northern Powerhouse initiative. During the same period, Inner London’s GVA grew by 6.9% whilst the economy of Cambridge, currently the fastest growing in the UK, grew by 7.1%. 

Leeds was positioned behind Manchester, which has seen output grow by 9.1% during the 3 year period, but Leeds’ job creation rate of 9.5% was however much higher than in Manchester and London, according to the study.

Highlighting the fact that more needs to be done to rebalance the UK’s economy, the report revealed that the longer term picture is not as promising. Leeds' economy is set to grow by 12.8% in the next 10 years, compared to 16.1% for London and 22% in fast-growing Milton Keynes.

Expert Opinion

“The results of this study are on the whole encouraging, particularly as it shows that Leeds is benefitting from a number of high growth industries including healthcare and medical technologies, edtech and game development.

“The city is home to large digital companies such as NHS Digital, Rockstar Games, and houses Sky’s Betting, Gaming, and Technology enterprises and in order to make sure the city continues to thrive, it’s crucial that these industries are allowed to flourish.” Andrew Walker - Partner

The latest report also analysed the impact of the Financial Services sector on the UK’s city economies and within the ‘Financial Powerhouse’ league table, Leeds came second to London in terms of both GVA and employment growth. 

The report said Leeds has expanded its financial sector substantially in recent years, with the city’s total output from finance and insurance increasing by 40% between 2012 and 2015. 

Also in the Yorkshire region, it says that Sheffield’s financial sector is on the up, expanding 28% from 2012 to 2015, with around 43,000 employed in the sector over 2016.

Jack Coy, Economist at Cebr, said: 

“Despite the UK-level economic slowdown over the first quarter, it is good to see some bright sparks in local economies across the country. In particular, the best performing cities have benefitted from a combination of cutting-edge, productive industries and high-skilled workforces. Once again, this quarter’s City Tracker highlights the productivity of concentrated industry hubs and the power of urban agglomerations.”

*GVA – Gross Value Added (the total value of goods and services produced)