London's record share of UK economy

London is vastly outperforming the rest of the country in pretty much every sense economically, according to new research. This news was gloated about in the capital’s free business paper, City A.M., on Thursday under the headline ‘London Rules’.

The paper cites research by Nick Crafts, professor of economic history at Warwick University, who says London’s share of economic output is larger now than any point in history. The capital now produces a larger share of the UK’s wealth than when London was the world’s pre-eminent metropolis in 1911. Back then, it was responsible for 21.5% of UK output whereas today it’s a record 21.9%.

Londoners not only work longer hours than their provincial counterparts, they also produce more with their time. Staff in the capital produced 32.1% more than people in their immediate surroundings, the south east. This figure rises considerably further away from the M25, with the north-eastern and Welsh workers flagging by 60% and 66.2% respectively.

London was it its lowest ebb in the 1950s, when its relative contribution was at its lowest. But since then, it’s continued to outperform the rest of the UK. This doesn’t just mean London is booming – it shows a deepening of the north-south divide. 

The figures are obviously skewed by the fact that the country’s most profitable industries – in particular financial services – are all based in the capital. But with the recession bringing more unemployment and bankruptcies outside the capital, London brings home the bacon while the rest of the country goes hungry.