Levelling the Scales: What the UK’s Productivity Shift Means for the East of England

Analysis of the most recent productivity figures[1] suggests that, for the first time in decades, Britain’s largest cities are outperforming the national average and catching up with London. Productivity growth in places like Manchester, Leeds and Liverpool has surged since 2019, raising questions about whether the apparent progress reflects real sustainable change — or flaws in the underlying data. For the East of England, the implications are both cautionary and promising.

Big Cities Rising, London Stalling

According to the report, by the Centre for Cities[2], productivity in large cities outside London has grown twice as fast as the rest of the country since 2019, while London’s productivity has stagnated at roughly the same level it was two decades ago. If accurate, this signals the first meaningful economic convergence between London and the rest of the UK in half a century.

England’s second tier cities have driven much of this change, recording productivity growth three to four times the national rate. This is a striking reversal after years of relative underperformance. The report notes that this shift is partly the result of data anomalies in how the Office for National Statistics (ONS) measures labour inputs—particularly around self-employment.

Yet when adjusted for more consistent employment data, the pattern still holds: London’s growth has slowed, and the big cities’ productivity has strengthened, though the degree of convergence is less dramatic.

What It Means for the East of England

Unlike most other regions and nations in the UK, the East of England lacks a large urban conurbation. It is instead dominated by small and medium-sized cities like Norwich, Cambridge, and Peterborough. The data suggests that these have also improved productivity since 2019, albeit less sharply than the largest urban centres.

The findings underscore the importance of scale and investment in driving productivity growth. The region has long benefited from a world-class innovation ecosystem and strong links between research and business. Cambridge is still one of the most productive cities in the country, but its size relative to the region as a whole means that it represents a small proportion of the overall economy. This lack of scale means that the East of England is performing below the national average and has fallen marginally behind the North West in terms of productivity growth, ranking 4^th among all regions in England.

This points to the need to accelerate the growth of Cambridge as a determining factor for the region’s future. Cambridge’s ambitions to scale up are under threat from major infrastructure constraints which place the city’s growth model—and by extension the wider region’s growth prospects—at risk. Unless Cambridge can deliver water supply, new high-quality housing, and modern transport links, its ability to act as a growth engine for the East will be compromised.

For the East of England, this means the region’s broader productivity opportunities may hinge on whether Cambridge can expand sustainably and inclusively. Accelerating growth by deepening collaboration across the region’s urban network - the so-called Tech Corridor connecting Cambridge, Peterborough and Norwich;  the Innovation corridor connecting Cambridge with the capital and beyond; and the Oxford and Cambridge corridor - are vital to this project.

The Government’s announcement that it will invest £500 million to drive regional growth in what it calls “Europe’s Silicon Valley”, focused on the Oxford–Cambridge Corridor is a welcome boost to this agenda. The majority of this investment, £400 million, will go to the Cambridge area, to drive innovation-led growth through housing, rail, and research infrastructure.

With Greater Manchester and the West Midlands showing that devolved leadership and long-term investment can deliver measurable productivity gains, the East of England faces a clear challenge: to strengthen local governance and build capacity for city-region-wide strategies that link innovation, skills, and infrastructure.

Caution in the Data, but Confidence in Direction

Policymakers should treat subregional productivity figures with caution. However, the underlying story—a stronger performance by cities outside London—still holds weight.

For the East, this means the policy direction remains sound: strengthening city economies, empowering local leadership, and investing in transport, housing, and innovation are the right levers for growth. The stagnation of London’s productivity also reinforces the need for a more balanced national economy—one less reliant on the capital’s output.

Policy Lessons for the East

1. Back City-Region Leadership: The success of devolved city mayors elsewhere shows the value of strong local governance. Empowering local authorities in the East with more fiscal and strategic powers could help unlock productivity potential across the region.

2. Invest in Innovation Infrastructure: Cambridge’s innovation base should be better connected to Peterborough, Norwich, and coastal areas through shared innovation assets, applied research centres, and digital infrastructure.

3. Support Inclusive Growth: Productivity gains in the East must translate into good jobs, affordable housing, and health improvements, especially in areas with persistent deprivation.

4. Improve Connectivity: Strengthening east-west transport links—particularly between Cambridge and Norwich—remains essential for regional integration and access to opportunity.

Conclusion

The message is clear: with strategic investment, devolved leadership, and a focus on innovation, the UK’s regional economies can begin to close the long-standing productivity gap. For the East of England, that means capitalising on its scientific excellence and strong civic networks to build a more resilient, balanced, and inclusive regional economy.

[1] ONS - Subregional productivity: labour productivity indices by local authority district, 2025

[2] How productive are the UK’s big cities? Centre for Cities, October 2025