The UK’s economic rebalancing challenge will require radical thinking to drive more balanced growth within its regions
Key findings
- London will continue to outperform all other UK regions through to 2021, with Gross Value Added (GVA) growth per year of 2.1% – but this is nevertheless down from the 2.5% growth seen between 2015 and 2018.
- As continued Brexit uncertainty hampers the outlook for the UK capital, the gap between London and the other regions is expected to be smaller over the next three years with the West Midlands (1.7%), the South East (1.7%), and the East (1.6%) in the following three positions.
- The South East is the only region expected to see an increase in employment growth in the next three years compared to the previous three. A slowing economy, expected lower EU immigration and technological change are all contributing to this anticipated shift in the labour market.
Related article
London will continue to outperform other regions
2.1The percentage EY ITEM Club expects London’s annual GVA to grow to 2021
- Regions with a large manufacturing base enjoyed a boost last year, with the weaker sterling making exports more competitive. The West Midlands in particular benefitted from this. However, more subdued growth is expected for these regions in 2018-21.
- Find out more about how the regions performed in 2018.
Related article
The UK’s approach to geographic rebalancing must identify how smaller cities and towns, and the more remote parts of the country, can benefit from the success of the faster-growing core cities.
Mark Gregory
EY UK Chief Economist
Summary
Economic rebalancing is vital across the UK to increase growth across its regions and find ways for its smaller towns to benefit from faster-growing neighbours.