Press Release: Parts of Midlands and North West face up to 50% decline of economic output

Building on the latest figures from the Office for Budget Responsibility (OBR), the Centre for Progressive Policy (CPP) finds that the economic impact of coronavirus will vary significantly across the country. Find the full article here.

Key findings

  • The decline in economic output is estimated to reach close to 50% in parts of the Midlands and the North West in the second quarter of this year. In other parts of the country, the hit to the local economy may be half that.
  • Nine of the ten worst affected local authorities are in the Midlands or the North West.
  • Of the twenty hardest hit local authorities, only one – Hart – is in the South East or London.

CPP has applied the OBR's methodology to every local authority district in the UK, weighting the average sectoral hit by the distribution of each local authority’s GVA by sector. The results show significant place-based variation in the size of economic contraction resulting from the coronavirus shut down (chart below).

The analysis shows the importance of viewing the economic impact of the coronavirus through a place-based lens. The challenge the Chancellor faces is one of shoring up, before moving to a revitalised levelling up agenda that recognises the new place-based challenges facing the economy.

In the coming weeks and months, CPP will be working to explore the potential longer-term economic challenges and policy solutions for different places in the wake of this crisis.

Find previous Covid-19 related work here, including CPP's local area risk rating indicating which local authorities face the greatest health risk from Covid-19 - updated weekly.