VALUE added by production activity in the capital saw the slowest growth out of all UK regions in 2010, figures out yesterday from the Office for National Statistics revealed, which analysts blame on the financial and business services sector contracting in the year.
Gross value added (GVA) per head rose by 0.7 per cent in London in 2010, against a national increase of 2.5 per cent.
Wales and the East Midlands experienced the fastest growth at 3.3 per cent.
All regions declined in the previous year, but London’s rebound was the smallest.
However, London’s GVA per head remains the highest in the country at £35,026, while Wales had the lowest at £15,145.
Once taxes are taken into account, GVA becomes GDP, showing London’s economy grew more slowly in 2010 than other parts of the country.
“The UK economy grew overall last year, and most sectors expanded,” said Howard Archer, economist at IHS Global Insight.
“However, business services and finance contracted by about one per cent in 2010 – bearing in mind where London’s strengths are, that may account for the slow growth.”
Financial and insurance activities accounted for around 21.5 per cent of London’s GVA last year.
Manufacturing is the largest industry in both the East Midlands and Wales, with motor sales and health care second largest in each region respectively.