Will the North of England's productivity gap versus the Greater South East narrow by at least 10% by 2032-12-31?

probability: 44%

rationale:

Based on 2023 ONS GVA per hour worked data, weighted by regional output ons.gov.uk, the aggregate productivity index for the North of England sits at roughly 90.9, while the Greater South East (GSE) is at 114.0. This represents a gap of approximately 23 index points ons.gov.ukons.gov.ukons.gov.ukons.gov.ukons.gov.ukons.gov.uk. A 10% relative reduction by 2032 requires closing this gap by just over 2 index points—meaning the North/GSE productivity ratio must improve from roughly 79.7% to 81.7%. This demands a cumulative relative improvement of about 2.5% over an 8-to-9 year horizon.

The modesty of this required shift, combined with recent data, presents a plausible path to convergence. Between 2019 and 2023, the North West demonstrated strong momentum, achieving a cumulative average annual growth rate of 2.4% ons.gov.ukons.gov.uk, while London's output per hour stagnated or fell ons.gov.uk. Evidence highlights a post-2019 narrowing of the productivity gap between London and major regional cities centreforcities.org. Policy investments could further support this trend, notably the 2025 UK Infrastructure 10 Year Strategy's £15.6bn for Transport for City Regions and £3.5bn for the Transpennine Route Upgrade assets.publishing.service.gov.uk, alongside the modern industrial strategy's focus on high-potential clusters gov.uk.

However, several structural and measurement hurdles make sustained convergence less likely than a return to the historical trend. First, the assessment aggregates the entire GSE, not just London. The robust post-pandemic performance of the South East and East of England productivity.ac.uk dilutes the impact of London's specific weakness. Similarly, the North must be viewed in aggregate; the North West's recent outperformance is offset by weaker underlying metrics in the North East and Yorkshire & the Humber.

Second, evidence suggests the recent apparent convergence may be a statistical anomaly rather than a genuine economic pivot. Research warns that ONS subregional productivity growth may currently be inflated by COVID-era data artifacts, labour-input measurement problems, and denominator issues productivity.ac.ukcentreforcities.orgeconomicsobservatory.com. As data is revised and London potentially rebounds from its 2023 trough, the gap may re-widen; short-to-medium term forecasts anticipate regional divergence resuming between 2024 and 2027 theguardian.com.

Finally, the UK's regional spatial inequalities are deeply entrenched, driven by interlocking constraints in skills, finance, and graduate migration ifs.org.uk. Previous levelling-up missions have broadly failed to deliver meaningful change gov.ukinstituteforgovernment.org.uk.

While the required 10% relative reduction is mathematically small enough to be achieved via continued North West momentum or even normal data variation, the underlying structural persistence, GSE-aggregate dilution, and the strong possibility that recent convergence is a cyclical data artifact temper optimism. The balance of evidence points to near-stability or slight re-widening, placing the probability modestly below even.