Tackling the UK’s regional economic inequality: Binding constraints and avenues for policy intervention

Abstract

For most of the 20th century, inequality in GDP per capita between UK regions – while not insignificant – was relatively low by European standards (Rosés and Wolf 2018). In the 1980s and 1990s, however, regional economic inequality began to rise in most industrialised economies (IMF 2019). The UK stands out for how far this has developed: by the 2010s the UK had become one of the most regionally unequal of the world’s industrialised economies in terms of GDP per capita, productivity, and disposable income (McCann 2020).