"The gap between London and other UK cities is widening and we are failing to make the most of cities' economic potential."
- Alexandra Jones, chief executive of Centre for Cities
British economy is in its best shape since 2007 and this week's report is likely to confirm that. With GDP growth around 0.8%, 2013 will be the first full year of economic growth since the financial crisis, when the U.K. economy posted solid growth in every quarter.
It seems that the economy is on the right track with inflation being in line with BoE's target and unemployment rate close to its threshold of 7%. Nonetheless, the economic imbalance is growing and posing a significant risk for policymakers, who seek for a stable growth and long-term prosperity. Currently, London accounts almost 79% of national private-sector jobs growth. During the 2010-2012 period the capital created 216,700 private sector jobs, a figure almost 10 times bigger than the second-fastest growing city– Edinburgh. Moreover, more than 30% of all people aged between 22 and 30, who left their cities headed for London. At the same time, such cities like Bradford, Glasgow and Blackpool had posted job losses over the same period, making people living in these places unlikely to feel economic recovery.
With the pace of home price growth outpacing the growth in consumer prices and growing imbalance between cities the government should focus on other programmes, which are aimed not only at improving credit affordability.
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