Global Macro Chart of the Day (#136): Britain‘s Uneven Economy

Research evidence excerpt

Global Macro Chart of the Day (#136): Britain‘s Uneven Economy

Global Research

31 July 2026ab

Global Macro Chart of the Day Economics

Global(#136): Britain's Uneven Economy

Arend Kapteyn

Economist

Large regional disparities in UK income and fiscal deficits arend.kapteyn@ubs.com

+44-20-7567 0531

One of the most striking findings in the health inequalities literature is that male life

expectancy differs by around 15 years between the most and least deprived parts of

Glasgow. That is within a single city; for context, a 15-year life expectancy gap is roughly

equivalent to the gap between the UK and Ghana, even though the UK's GDP per capita

is around 7-8 times higher on a purchasing-power-parity basis (and around 20 times

higher at market exchange rates). Although deprivation can explain a good part of the

different outcomes in Glasgow, it is not the only factor as other cities across the UK with

similar income levels have better health outcomes. These inequalities are not only a

public-health challenge but also an important economic and political issue.

One way to illustrate regional disparities is through regional fiscal balances. The chart

below shows that only two of England's nine regions record a fiscal surplus. We

calculate each region's fiscal balance (government revenue minus public expenditure) as

a share of regional GDP. London and the South East account for around 32% of

England's population but approximately 43% of its GDP, and their fiscal surpluses help

offset deficits elsewhere in the country.

These differences largely reflect regional income disparities. GDP per capita in London is

around £76,000, compared with roughly £31,000 in the North East, the English region

with the largest fiscal deficit relative to the size of its economy. Higher incomes generate