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London and south east now accounts for £4 in £10 of total UK economy

London accounts for almost a quarter of the UK’s total economic activity, according to new figures from the Office of National Statistics.

The capital accounted for 22.7 per cent of total UK Gross Domestic Product in 2019, and 23.8 per cent of total Gross Value Added.

When the south east is added, that figure rises to 37.5 per cent and 38.4 per cent.

London business leaders said the figures demonstrated the need for “concerted action” to ensure the capital continues to power the country’s economy in the aftermath of Covid-19.

And, in the ten years to 2019, London saw GDP growth of 49 per cent compared to 33 per cent across the whole of the rest of the country.

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Total GDP (£m)Percentage of total
UK2,214,362100%
England1,902,98685.94%
North East64,2602.90%
North West212,8439.61%
Yorkshire / Humber146,7466.63%
East Midlands129,8545.86%
West Midlands163,6247.39%
East of England190,9628.62%
London503,65322.74%
South East327,10214.77%
South West163,9417.40%
Wales77,5173.50%
Scotland166,9577.54%
Northern Ireland48,5842.19%
Extra-Regio18,3180.83%
Source: Office of National Statistics

The new data suggests UK GDP grew by 1.3 per cent in 2019. London witnessed the largest growth at 2.2 per cent. Total GDP per head in London was £56,149, compared to the UK average of £32,876.

The Covid-19 pandemic, however, is expected to have hit the capital hard – with hospitality and tourism both hard-hit by lockdowns.

Laura Osborne, Interim Corporate Affairs Director of London First, said: “Central London lost more jobs than any other region, but the stats show that the capital’s economy remains vital to the economic recovery of the whole UK.

“The UK’s rapid economic recovery demands a vibrant, growing capital city. Concerted action is needed to bring people back to the capital, to put Transport for London on a sustainable financial footing and to turbo-charge reskilling. Simply leaving London to bounce back is not enough.”

By James Silver

Source: City AM

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UK suffers worst annual slump since 1709

The UK economy contracted by 9.9% in 2020, its largest annual contraction since the Great Frost of 1709, as the coronavirus pandemic ravaged economic activity.

In the final quarter of the year, gross domestic product (GDP) grew by 1%, according to the Office for National Statistics, as the country re-imposed nationwide lockdown measures in a bid to combat a resurgence of Covid-19 cases.

The 9.9% annual contraction is more than twice that seen in 2009 in the aftermath of the global financial crisis, and narrowly worse than the 9.7% slump during the crisis of 1921.

Economists polled by Refinitiv had expected an 8% annual decline, in 2020 with a fourth-quarter expansion of 0.5%. This follows a revised 16.1% rebound in the third quarter as social, travel and business restrictions were eased.

As of Friday morning, the UK has recorded more than 4 million cases of Covid-19 and 115,000 deaths, according to data compiled by Johns Hopkins University. The UK has been blighted by new and more transmissible variants of the virus in recent months.

Hitesh Patel, portfolio manager at Quilter Investors, said the U.K. had experienced an “annus horribilis” in the form of the “trifecta” of a public health crisis, economic shutdowns and uncertainty surrounding Brexit.

“However, 2020 is in the past and the UK arguably has a promising second half of the year ahead given the success of the vaccine rollout,” he said.

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“This could easily be derailed should one of the mutations prevent the vaccines properly taking effect, but for now a double dip recession has been avoided and soon lockdowns may potentially be the thing of the past.”

England remains in a nationwide lockdown with no clear end date, although British Prime Minister Boris Johnson confirmed on Wednesday that around one in four adults, approximately 13 million people, have now received the first dose of a Covid vaccine.

Monthly GDP in December increased by 1.2% from the previous the month, but remained 6.3% below the level of February 2020. Fourth-quarter GDP remained 6.6% below the level seen in the fourth quarter of 2019.

The services sector grew by 1.7% in December having contracted by 3.1% in November, while manufacturing posted its eighth consecutive month of growth, the ONS said, albeit its smallest incline since May 2020.

“The tighter restrictions imposed towards the end of last year, which are likely to remain in place for much of the current quarter, suggest that the economy may shrink again,” said Dean Turner, economist at UBS Global Wealth Management.

“However, what is clear from the data is the resilience and adaptability of firms and households, so any contraction will be modest. As and when restrictions are eased, we continue to expect a vigorous rebound in the UK economy.”

By Elliot Smith

Source: CNBC

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