Economic growth picked up in Q2. The UK economy expandedby 0.7%q/q. However, our Regional Growth Tracker suggests that the gains were very unevenly distributed.

Out in front, on its own, was London. The capital grew by 0.7%q/q. The reason? ICT and professional, scientific and technical services. Both sectors had a good quarter and London is more reliant than most on these. And after a good start to the year, the North East and North West found themselves falling slightly from the head of the pack. Bringing up the rear, Yorkshire & The Humber, whose higher reliance on a manufacturing sector that struggled in Q2, saw its economy grow at a much slower rate of 0.3%q/q.

At a local area level, there were some familiar faces leading the way. Inner East London came top, growing by an estimated 5.1%y/y. The rest of the top 5 regions in England & Wales in Q2 included: Milton Keynes, Inner West London, Cambridgeshire and Berkshire. Their outstanding performance was driven by a mix of service sectors ranging from retail to business services, as well as their industrial competitiveness relative to their peers. With the exception of Milton Keynes, this has meant a fall in unemployment rates over the past year.

We would also note that the UK Continental Shelf, a region we do not cover in our growth tracker, made a significant contribution to UK growth, as oil and gas extraction had a very strong quarter. Excluding this sector, the UK economy grew by 0.5%q/q, meaning that on our estimates London, the South East, the South West and the North West all grew at or above the national average.

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