Leeds’s economy has grown at a faster pace than London during the three years since the Northern Powerhouse was launched, new figures show.
Information in the UK Powerhouse report, showed that Leeds’s economy had grown by 8 per cent since George Osborne launched the initiative at the end of June 2014.
This compared with London which grew by 6.9 per cent.
The new research showed certain sectors in Sheffield, York Bradford and Hull were all performing well too, with the former city having grown its financial sector by 28 per cent since 2014.
However the report, compiled by think tank the Centre for Economics and Business Research (Cebr) and law firm Irwin Mitchell, showed that all of Yorkshire’s cities were positioned behind Manchester, which has seen output grow by 9.1 per cent in the same period.
However Leeds’ job creation rate of 9.5 per cent exceeded that of both Manchester and London, the research showed.
Within the league table for financial performance, Leeds came second to London in terms of both Gross Value Added (GVA) and employment growth.
Elsewhere York and Wakefield were both shown to be leading the way for employment in the UK.
The study, which provides a quarterly estimate of data and job creation within 45 UK cities, also highlighted the fact that more needs to be done to rebalance the UK’s economy, revealing the longer term picture to be slightly more bleak as it predicts that the gap between London and the rest of the UK will get even wider by 2026.
Leeds’ economy is set to grow by 12.8 per cent in the next 10 years, compared to 16.1 per cent for London and 22 per cent in fast-growing Milton Keynes.
Andrew Walker, head of business legal services at Irwin Mitchell in Leeds, said: “The results of this study are on the whole encouraging, particularly as it shows that Leeds is benefitting from a number of high growth industries including health care and medical technologies, edtech and game development. The city is home to large digital companies such as NHS Digital, Rockstar Games, and houses Sky’s Betting, Gaming, and Technology enterprises and in order to make sure the city continues to thrive, it’s crucial that these industries are allowed to flourish.”
Mark Goldstone, head of business representation and policy at West and North Yorkshire Chamber of Commerce, said: “The Northern Powerhouse brand is already making a difference to perceptions around the world so it is pleasing to see this reflected in our city’s performance.
“Leeds is already proving attractive to investors in addition the growth of companies in the city has been strong since the end of the recession.”
Leader of Leeds City Council Councillor Judith Blake said: “Despite the continued challenging economic environment, Leeds has continued to perform exceptionally well, especially in regards to job creation which is the highest in the country.”
The report said Leeds has expanded its financial sector substantially in recent years, with the city’s total output from finance and insurance increasing by 40 per cent between 2012 and 2015.
It also said that Sheffield’s financial sector is on the up, with around 43,000 employed in the sector over 2016.
Jack Coy, Economist at Cebr, said: “Despite the UK-level economic slowdown over the first quarter, it is good to see some bright sparks in local economies across the country.”
While the performance of many key northern cities will be welcomed by business and civic leaders, the report did also sound alarm bells about a slowing economy and one that was still some way behind redressing the north south divide.
According to the Cebr and fellow authors law firm Irwin Mitchell the UK economy grew by 0.2 per cent in the first three months of the year, a considerable slowdown from a quarterly expansion of 0.7 per cent at the end of 2016.
The slowdown in GDP was predominately driven by a weakened performance in the services sector,as a squeeze on household incomes continues to reduce consumer spending.