Economic gap between London and rest of UK closing, study suggests

The economic gap between London and the rest of the UK is narrowing, with cities in the Midlands and the north of England witnessing noticeable growth over the past year, research has suggested.

Birmingham, Leeds, Newcastle, Liverpool and Derby are among the most improved cities in the UK, based on metrics such as employment, health, income, skills, housing affordability and commuting times.

London and Southampton were the only cities from the south of England to feature in the list of most improved cities.

The study from consulting group PwC and think tank Demos also revealed that Oxford was the highest-ranked city in the UK, closely followed by Reading and Southampton.

All 42 cities analysed by the study improved compared to last year, driven primarily by increasing employment, with the good growth index of the cities at its highest level since the study began in 2005.

However, declines were recorded in housing affordability, owner occupation rates, health and work-life balance metrics, while average commuter times were on the up.

"We've seen broad-based improvements in our good growth index across the UK, driven in particular by falling unemployment rates," said Paul Terrington, head of regions at PwC.

"Some areas in the North and Midlands that had lagged behind in the recovery from the financial crisis are now showing clear improvements in their index scores. The economic recovery is now spreading across the country rather than being focused on London and the South East.

"However, we are also seeing the price of prosperity in terms of growing pressures on scarce resources of housing, transport and skills.

"If UK cities are to sustain the relatively strong performance of recent years as we move through Brexit and beyond, it will be critical to address these challenges as part of the cities' growth strategies, rather than trying to fix the problems later when they become serious constraints on growth."