Economic gap to widen by £50bn between Yorkshire and London in next 10 years

The economic gap between Yorkshire and London is set to widen by £50bn over the next 10 years, according to a new report.

Sheffield-headquartered law firm Irwin Mitchell’s UK Powerhouse report, which has been produced with the Centre for Economic and Business Research (Cebr), provides an estimate of GVA and job creation within 38 of the UK’s largest cities 12 months ahead of the Government’s official figures.

The latest report shows that Yorkshire’s largest cities experienced significant growth in output during the second quarter of 2016.

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 was recorded at 1.7%.

In addition, 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.

However, the report also predicts that the city economies in Yorkshire will continue to be outpaced by others in the South East.

By 2026, the report claims London’s economy will expand by 16.3% and that cities in the South such as Milton Keynes and Cambridge will grow by 22%.

The report also 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% and 10.3%.

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.”

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