Regional prosperity being hit by Brexit uncertainty

Prosperity Map shows ‘fluctuating’ economic fortunes also taking a toll

Tougher economic conditions and uncertainty surrounding Brexit talks are starting to take their toll on Britain’s regional prosperity, a new report shows.

Areas including Scotland, Wales, London, and England’s North East, North West and South West have all seen a drop in their overall affluence, according to Barclays’ 2017 UK Prosperity Map.

Regional scores are calculated based on factors such as gross domestic product per capita, house prices, charitable giving, working hours and average house prices.

While some regions including the South East, East Midlands and East of England experienced an overall rise in prosperity scores, the survey said most regions failed to benefit from the same boost to growth seen in last year’s research.

The slowdown was against a backdrop of “fluctuating economic conditions” as well as ongoing Brexit negotiations.

Dena Brumpton, Barclays’ chief executive of Wealth and Investments, said: “The last 12 months have seen fluctuations in the UK economy, and this is reflected in the mixed picture of prosperity growth across the country in this year’s UK Prosperity Map.”

Britain’s largest cities are also hoarding more wealth than their wider regions, highlighting discrepancies in GDP per capita and earnings, it said.

Newcastle, for example, saw the largest increase in average earnings across the country at 6.3%, but that failed to translate to greater prosperity for the wider North East region, which saw average earnings fall 0.3%.

It has raised concerns that cities like Newcastle are becoming islands of growth while the rest of the region faces harsher economic conditions.

Ms Brumpton said: “The continued economic growth of the UK’s cities is further cause for optimism – but if the current trend of high prosperity growth in cities continues, regions risk being left behind by their flourishing centres.

While London continues to top city prosperity tables, Newcastle and Birmingham had the largest rise in GDP per capita this year at 4.4% and 4.2%, outpacing overall UK growth of 1.8%.

London lagged behind in house price growth, at 3% compared to 8% in Birmingham and 7% in Manchester.

Nearly every city had higher house price growth compared to the capital.

Barclays data shows that the number of UK millionaires increased, jumping 7.6% year-on-year, with every region excluding Scotland seeing an increase in wealthy individuals.

According to data collected by Barclays covering the full year 2016, one-in-79 Brits are millionaires, up from one-in-84 a year earlier.

The East Midlands and South West experienced the greatest increase in their millionaire population, up 11.1% and 10.5%, respectively.

. . . regions risk being left behind by their flourishing centres. DENA BRUMPTON

Above: Scotland has dropped down the ranking on the Barclays 2017 UK Prosperity Map. Left: UK coastal communities lag behind inland areas, a new report suggests.