London still remains the most prosperous UK city, according to Barclays Wealth & Investments' UK Prosperity Map.
Birmingham and Newcastle saw the highest year-on-year increase in gross domestic product per capita, at 4.4 per cent and 4.2 per cent, respectively, according the annual UK Prosperity Map by Barclays Wealth & Investments.
The UK Prosperity Map is compiled by Opinium on behalf of Barclays. It ranks UK regions and cities in terms of their affluence. A Prosperity Index score has been calculated by Opinium for each UK city and region.
The research, against a backdrop of fluctuating conditions and Brexit negotiations, showed that most areas of the country are more prosperous overall than last year, in many cases cities are outpacing their wider regions, but there are clear disparities when it comes to GDP per capita and earnings.
Newcastle and Birmingham saw the biggest year-on-year increases in GDP per capita, as previously mentioned. While London continues to dominate as the UK’s most prosperous city along with Reading (2nd), other cities saw positive trends over the last year. Leeds changed places with Bristol to become the fourth most prosperous city in the UK.
When it comes to house prices, almost every city has seen higher house price growth than London (up 3 per cent), with Birmingham (8 per cent) and Manchester (7 per cent) seeing the biggest increases.
Such data can shed light on why certain private banks, such as Barclays, Coutts and Julius Baer, have regional presences. Earlier this year, Barclays' investment and wealth management business announced it was opening an office in St Albans, Hertfordshire. To take another example, Zurich-listed Julius Baer announced a new regional strategy to tap wealth beyond the usual redoubts of London and the Southeast.
Birmingham is also booming when it comes to start-up businesses – the city saw the highest business birth-to-death ratio of any in the UK with 1.81 businesses being created for every closure, beating London (1.78). At a regional level, London comes out top, but the West Midlands as a whole also ranks highly with a business birth-to-death ratio of 1.55.
Newcastle saw the greatest increase in average earnings of any UK city, up 6.3 per cent – but this is not reflected in the wider North East region, which actually saw a 0.3 per cent decrease in earnings. And the North East is also the least prosperous region in the UK, placed bottom of the 12 regions.
“The last twelve 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,” said Dena Brumpton, chief executive, wealth & investments at Barclays. “It’s encouraging to see that people across the country are benefiting from higher earnings and the momentum created by greater GDP per capita.
Brumpton added: “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. The challenge for businesses and policymakers is to find new ways of bridging this gap and ensuring greater balance in how each part of the UK is sharing in the country’s prosperity. We are continuing to work closely with our clients to help them boost their own prosperity, whether that is through investments, savings or planning for retirement.”
The number of wealthy individuals continues to increase: the UK’s millionaire population grew by 7.6 per cent year-on-year in 2016. Every region saw an increase in its number of millionaires since last year’s research, except Scotland, which saw no change. The East Midlands and South West saw the highest percentage growth in their millionaire population between 2015 and 2016 (11.1 per cent and 10.5 per cent respectively).