UK regions to fall further behind London

Many regions in the UK are expected to fall further behind London in the next three years, according to a recent report. This presents a challenge for the Labour government, which aims to improve living standards in all areas. The UK economy is forecast to grow by 1.6% each year from 2025 to 2028. This growth will come from lower prices, higher wages, and easier borrowing. However, most of the economic benefits will be concentrated in London and the east of England, which are the only areas expected to see growth above the national average. The analysis highlights a growing divide between knowledge-based industries and other sectors. Areas with more businesses in technology and science are likely to experience stronger growth and job creation. According to Peter Arnold, chief economist at EY UK, the pandemic has created a "two-speed economy" in the country. This situation shows that the previous government's promise to "level up" the country has not been fulfilled. Regions that felt neglected are now falling further behind London and the South East. The current Labour government hopes to boost growth nationwide by investing in infrastructure and public services. While certain sectors are expected to grow, others are still facing challenges. Areas relying on the oil industry, like Scotland and the north east of England, may struggle due to its decline. Regions such as Reading, Manchester, and Cambridge are projected to be among the fastest-growing due to their concentration of knowledge workers. Additionally, Labour's plan to build 1.5 million new homes by 2029 will benefit London and the south east the most. This could further increase the economic gap between regions, as some areas may not feel the effects of growth as strongly.