The all-important measure of the UK economy, Gross Domestic Product, is merely the weighted average of all the individual parts. The two most obvious ways of ‘disaggregating’ the whole economy is by industrial sector and by geographic region.

These two are not mutually exclusive of course, since over a long period, particular regions have built up specialisations in specific industrial activities. Since not all industries perform at the same rate, it follows that performance in each region will not necessarily mirror the national trend.

The most prosperous areas of the country are in the South and East, giving rise to the notion of a “North-South divide”.

At its most basic level, this reflects the differences between the old manufacturing and mining areas on the one hand and the newer and faster-growing service industries on the other.

Since the Second World War, all governments have accepted, to varying degrees, the need for policies to mitigate the consequences of regional imbalances (see 13.6 UK Government Approach, 5.3 Regional Policy 1945-97 and 5.5 Regional Policy since 1997).

These include, on the one hand, rural depopulation and urban deprivation, and on the other hand, housing shortages, traffic congestion and degradation of the environment.

There are also implications for the implementation of macroeconomic policies.

An over-heating economy in parts of the country could lead to the Bank of England’s Monetary Policy Committee (MPC) deciding to raise interest rates at a time when conditions in other regions are still depressed.

Large disparities in regional performance, therefore, have the potential to slow the economy’s overall rate of growth.

Since assuming responsibility for the setting of interest rates, the Bank of England has devoted a good deal of effort to tracking developments in regional economies.

For this purpose, it has appointed a series of regional agents who feed regular reports back to the MPC.

In recent years, regional assistance has become an important cornerstone of the activities of the EU although the EU’s recent enlargement has meant that this source of funding has become much less significant for regions of the UK.

There are several types of support available, with Objective One convergence funding being the most important, since it offers assistance to an entire region.

For the purposes of implementing the Government’s regional policies and collecting statistics, the country is divided into 12 Government Office Regions (GORs).

There are nine GORs in England, plus those covering Scotland, Wales and Northern Ireland. In England, the GORs also form the territories covered by the Regional Development Agencies (RDAs) which were formally established in 1999.