Spatially unbalanced growth in the British economy

The financial crisis and consequential recession that brought the UK's long economic boom of 1992-2008 to a dramatic end have generated considerable debate about the need to 'rebalance' the economy, both sectorally and spatially. In this article, we examine the scale and nature of imbalance in the British economy. We first examine the stylized facts of spatial economic imbalance, especially in relation to the recurring debate over the existence and persistence of a 'North-South Divide' in the nation's economic landscape. We then review some theoretical accounts of unbalanced regional growth and the role they give to sectoral structure and competitiveness. Next, dynamic multi-factor partitioning methods are used to determine the relative contribution that sectoral composition has made to Britain's North-South growth gap. In the light of our findings, we argue that the Coalition Government's policies to redress that imbalance are unlikely to have any profound impact.