Back in April, we released The UK Economy over Time (‘23 – ‘30) & from Place to Place, which made the case that in the years to 2030, Central and Northern England (CaNE) would record the strongest economic performance of the UK’s 12 regions. Much has, of course, unfolded through the intervening months; lots seemingly unfavourable for the UK economy in aggregate. In the light of the darkening economic clouds building over Britain, there will no doubt be those asking whether our view of CaNE – being the UK’s chief outperformer in future economic growth terms, map 1 – has altered.
Well, to be clear, the piece was penned after the war in Ukraine had already begun. It was written, however, before the UK entered yet another period of political ‘turmoil’. Surely this must force us into downward revisions and accept recession is now inevitable? Well, this is our rejoinder to those who cite the latest political drama as coming at the very worst of times – plus ça change.
Please consider the period since 2010. None can deny how over these years UK politics has for the most part been torturous to watch. And yet, as torturous as matters have been politically – four general elections and three referendums, creating varied forms of uncertainty – the UK economy Kept Calm and Carried On. Even in its somewhat erratic exit from lockdowns – which it should never have endured as it did – the UK has for the most part exhibited no worse signs, and in many instances better ones, than other developed economies.
“Without playing down the challenges which have recently hit it, the UK economy is fundamentally sound in all its key macro elements”
Many others have taken red pens to forecasts for the UK economy, doing so in large part because of the economic headwinds stirred up by what has unfolded in Ukraine and the all-change at Downing Street. We, however, continue to see things very differently, for without playing down the challenges which have recently hit it, the UK economy is fundamentally sound in all its key macro elements. While it may seem a crude or odd representation, one could picture the UK economy as a three-legged stool (figure 1). On three occasions since 1979, one of these three legs has buckled and in doing so has not simply toppled the UK’s stool, but buckled the other two legs to bring the whole economy crashing down. For a raft of reasons, the UK economy now sits comfortably supported by three strong legs.
