The rise and rise of the South

Bright lights, big city: London is the UK's financial centre

Will the north of the UK ever catch up with the booming southeast?

A report on Monday forecast that the south-east would continue to experience stronger economic growth than the north of England.

In recent popular memory London and the south-east of England have enjoyed a boom in sharp contrast to the economic conditions seen in the fading industrial heartlands of the north.

But the boom in the south-east is a relatively new phenomenon and its prosperous areas often border on some of the country's most deprived economic blackspots.

Boom time

In general though, as the service sector supplanted manufacturing in importance to the national economy in the post-war years, the importance of the industrialised north to the UK economy shrank.

Meanwhile the south-east benefited from the service sector boom.

London - long the UK's financial centre - benefited from the mushrooming of financial service industries.

"More recently London seems to have developed as a centre for business services and financial services and reduced its reliance on manufacturing," a spokesman for the London Chambers of Commerce said.

In favour of the south-east was its diversity of business, its young and mobile workforce and international transport links.

"The prosperity of the south is a relatively new phenomenon. If you look back 50 years and 100 years before, it would have been the north outstripping prosperity in the south," Solomon Peters, economist at the Centre for Economic and Business Research said.

Power shift

Many countries have seen their economic power base shift from one region to another.

This usually happens when there is a structural shift in the economy, for example when the service sector supplants manufacturing in its importance to the economy.

In France, the strongly agricultural south has long lost sway to Paris and the more industrial north.

In the UK, some attribute the south-east's prosperity to its proximity to the capital, others see this as incidental.

Many European cities may be the administrative capital, but other cities are the country's economic heart.

Berlin is by no means the most prosperous region in Germany, with Frankfurt the financial centre and most booming industries located in the south.

New economy

In the UK, focus is now on switching to the 'new economy'. This development is again benefiting the south-east.

"The creation of new economies and creation of new technologies has tended to be concentrated in the south, which has added on to the prosperity of the south," Mr Peters said.

The new economy is by its nature portable, though at present, the skills base in the south-east is geared towards the new economy.

But prosperity in the south-east is not uniform.

Unemployment in London is higher than the national average, the London Chamber of Commerce points out, with Haringey an unemployment blackspot.

"What are we concerned about is this uneven balance in London's economy. We would dispute the north-south divide, you might say there is an east and west London divide," a spokesman for the London Chamber said.