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London 'may lose economic supremacy'

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Average salaries have fallen more than any other region, but London still has the highest number of vacancies

London may soon lose its economic supremacy over the rest of the UK, according to research from Adzuna.

Average salaries in the capital have fallen more than any other region in the UK in the past year, with a drop of 3.9%.

This compares with Northern Ireland, which saw a drop of 1.1%; South West Wales, which saw a drop of 1.9%; and Wales, which saw growth of 0.5%. These results suggest the UK is becoming less capital-centric.

London continued to be the region with the highest number of advertised vacancies (248,605 in the past year) and the highest average salaries (£38,449 over the past year).

When it came to the ratio of candidates to roles, Cambridge was most favourable for jobseekers, with 0.07 for every vacancy. Belfast, however, saw 2.93 jobseekers per vacancy, Sunderland 2.79, and Hull 2.54.

Doug Monro, co-founder of Adzuna, said it is encouraging to see better distribution of wealth across the country. “Despite the salary decline in London, these figures show that as a whole businesses are pushing for the jobs market in all regions to not only encourage, but contribute towards, the overall productivity of the UK equally,” he said. “This shift away from a capital-centric focus will open many doors and create multiple opportunities for other regions.

“The shift in the jobs market outside of the capital may have been caused in part by the property market in London, as unattainable house prices coupled with stagnating salaries force consumers to relocate to increase their disposable incomes and stand a chance of getting on the property ladder.”

Separate data from the Association of Professional Staffing Companies (APSCo) found that the number of new IT and finance jobs fell by 2% in the past three months. Demand fell for both permanent and contract staff, with the former suffering more than others.

The researchers suggested this was due to banks planning to move large numbers of jobs out of the capital as a result of Brexit – for example HSBC and UBS have revealed plans to move at least 1,000 jobs each.

“There is no doubt that parts of the UK jobs market have suffered in the months following Brexit – and our data demonstrates that employers continue to take a far more cautious approach to hiring,” said Ann Swain, chief executive of APSCo. “However, it is not all doom and gloom; with several indicators suggesting that the UK is faring better than expected following the referendum.

“The IMF has raised its forecast for economic growth this year, the latest Purchasing Managers’ Index shows manufacturing growth at a 30-year high, and the latest PwC survey reveals 89% of CEOs are optimistic about growth prospects in 2017 – up from 85% last year.”