Greater Manchester’s economic growth outstrips Inner London despite “tough headwinds”

Despite slowing down in Q4, the economy of Greater Manchester grew faster than Inner London at the close of 2015 according to new research.

In its latest UK Powerhouse report produced alongside the Centre for Economic and Business Research (Cebr), law firm Irwin Mitchell found that Greater Manchester’s economy grew by 2% in the 12 months to Q4 2015, compared to 1.9% in central London.

The figure is however lower than economic growth at previous points in the year, with the 12 months to Q3 2015 showing growth of 2.5% for the heart of the Northern Powerhouse.

The report found that in December, Greater Manchester’s economy was worth £57bn, with more than 1.26m people in employment across the county.

The employment figure, which represents a year-on-year increase of 2.8%, places Greater Manchester ahead of Newcastle (at 2.2%), Leeds (2%) and Sheffield (-0.4%), but behind Liverpool (4.4%).

As with the rest of the UK, Cebr has reduced its 2016 GVA forecast for the North West. While the region was expected to reach an economic value of £149.6bn by the end of this year, that figure has now been lowered to £148.9bn.

Despite Greater Manchester growing faster than London at the close of 2016, projections for the next decade still place the capital well ahead of the rest of the UK.

The economic gap between London and the North currently sits at £62bn, but the figure is due to reach £115bn by 2025, according to the report.

Irwin Mitchell’s Manchester-based head of legal services, Roy Beckett, said: “The last quarter of 2015 was a tough one for Greater Manchester, but the city showed great resilience in the face of some tough headwinds.

“There is clearly still much to be done to tackle the North-South divide and it’s vital that the announcements relating to infrastructure which were made at the Budget last month are supported by a broad range of other policies including the devolution of more powers, greater involvement of businesses in education policy and the creation of more enterprise hubs around universities.”

The UK Powerhouse report, first launched in October 2015, looks at job creation and GVA in the UK’s 38 biggest cities.