Economic recovery is converging across the UK regions, says top City consultancy

Roger Bootle, managing director of Capital Economics
Roger Bootle, managing director of Capital Economics
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THE ECONOMIC performance of Britain’s regions has converged as the recovery spreads, according to a respected City consultancy, writes Bernard Ginns.

Capital Economics, led by commentator Roger Bootle, said it is hard to identify the fastest and slowest growing areas from the most recent economic data.

But it warned that “this is not the same as convergence in long-term economic growth”.

Highlighting the challenge in effective rebalancing, a new report from the consultancy said London is continuing to outperform the rest of the UK.

Yorkshire’s economy is growing broadly in line with the national average, according to the report.

“Some even say that it doing a lot better than that, although that seems a little doubtful,” it added.

Economic indicators present a mixed, contradictory picture, suggesting a slowdown in activity and an increase in employment over the last three months.

Latest research from accountancy firm BDO, published separately today, shows that private sector hiring intentions have reached a six year high, approaching levels not seen since before the pre-crisis economic boom in 2005-2007.

Terry Jones, head of BDO in Yorkshire, said: “After a difficult few years, the above-trend growth we’re seeing in businesses’ hiring intentions bodes well for George Osborne ahead of the election.

“The Chancellor cannily qualified his recent pledge to create a ‘full employment’ economy.

“But with growth strongly on track and employment levels rising, he may be able to claim success sooner than might be expected.”

Another survey out today from fellow accountants at Deloitte shows that appetite for risk has reached a six-and-a-half-year high with a strong outlook for hiring and spending.

In a reversal of recent thinking, chief financial officers now see UK growth as a greater driver of investment than activity in emerging markets, said the survey.

Martin Jenkins, head of Deloitte in Yorkshire, said evidence suggests a surge in corporate spending will become a major driver of the UK recovery.