A new report released by Irwin Mitchell has predicted that the economic gap between Yorkshire and London will widen by £50bn in the next ten years, despite the region’s largest cities experiencing significant growth in output during the second quarter of 2016.
Irwin Mitchell’s latest UK Powerhouse report, which has been produced with the Centre for Economic and Business Research (Cebr), provides an estimate of Gross Value Added (GVA) and job creation within 38 of the UK’s largest cities 12 months ahead of the Government’s official figures.
In the most recent version of the report, the economy in Leeds recorded a year-on-year rise in output in growth of 2.2% in Q2 2016. In the previous quarter, annual growth in Leeds stood at 1.7%.
Sheffield’s economy grew by 1.8% in the 12 months to Q2 2016 compared to 1.5% in Q1 and Hull’s economy expanded by 2.1% in Q2 compared to 1.5% in Q1.
In what is a blow to the Government’s economic rebalancing plans, the report predicts that the city economies in Yorkshire will continue to be outpaced by others in the South East.
By 2026, it predicts London’s economy will expand by 16.3% and that fast growth cities in the South such as Milton Keynes and Cambridge will grow by 22%.
Meanwhile, the report predicts the economy of Leeds, Sheffield, Hull and Bradford will see growth by the end of the next decade of 13.1%, 11.6%, 11.1%, 10.3% respectively.
The study predicts that the gap between London and the Yorkshire region will grow by £49.9bn between now and the second quarter of 2026.
Niall Baker, CEO at Irwin Mitchell’s Business Legal Services division, said: “There has been a significant amount of political uncertainty over the last couple of months so it is pleasing to see that there has been a recovery of growth rates in the Yorkshire region.
“What is perhaps more significant however is the lack of progress is tackling the divide between London and the North. The Northern Powerhouse initiative has now had the backing of Theresa May and it is vital that the Government refocuses its efforts in this area and ensures economic prosperity is shared fairly.”
