A new report on prospects for growth and employment paints a bleak picture of a north-south economic divide in the UK.

The survey, by economic analysts Business Strategies, said the southern regions of England, including London, the south east, the south west and eastern, are expected to see output growth rise to 3.4 per cent this year from 2.8 per cent in 1999.

However, all other locations, including the North-East and Yorkshire can expect to see much more modest growth of 2.2 per cent, up from 1.4 per cent.

Employment is expected to follow the same pattern, with the workforce in the south of England expected to increase by 1.1 per cent this year, the same as 1999.

The remaining regions are expected to show a more modest 0.3 per cent rise in staff static on this year.

In addition, new economy jobs in the south, in the information, computer and communications sectors, would disproportionately benefit the whole region, Business Strategies said.

The UK as a whole is forecast to see output growth of 2.8 per cent this year, up from 2.1 per cent last year.