Britain’s Anchor Economies: Understanding UK Regional Growth

Britain’s Anchor Economies are local economies where large employers, major sectors or specialist business clusters make an outsized contribution to jobs, output and prosperity. HSBC’s report examines the nation’s 1,200 towns and cities through two measures, the Anchor Economy Index and Resilience Index, to identify where large corporates are supporting regional growth and where concentration may create vulnerabilities.

The HSBC ‘Britain’s Anchor Economies’ Report comes at an important point in the UK growth debate, as attention focuses on the role city regions and devolution could play in shaping economic development and responding to local priorities.

Large corporate employers play a defining role in many local economies, supporting jobs, skills and wider business activity. Through two complementary lenses, the report identifies Britain’s ‘Anchor Economies’, including places where major employers or specialised sectors act as an engine of local economic growth.

The report provides a blueprint for driving regional growth, grouping every UK local authority into four categories: Resilient Anchor, Emerging Anchor, Broad-based and Emerging economies. Each category has different policy priorities spanning major-employer attraction, skills, infrastructure, productivity and investment.

The analysis provides a clearer picture of how characteristics and resilience vary across Britain, helping inform the debate around regional growth and the role large employers can play in spreading prosperity beyond London.

Half of all UK jobs are concentrated in just 147 local economies, which collectively support 17 million jobs.

These Anchor Economies generate around £1.4 trillion for the UK economy each year, while also demonstrating stronger household incomes and wider indicators of prosperity.

With 68% of Anchor Economies located outside of London and the South East, large employers are identified as a key driver for local economic success by creating jobs, supporting supply chains and helping specialist business clusters develop.

Large businesses’ contributions to employment, turnover and wider economic activity are disproportionate relative to their share of the business population. This finding is also evident across all major regions.

Chart: Contribution of large businesses to employment, by region

The most resilient local authorities reveal two distinct routes: affluent commuter towns combining strong incomes, skills and growth, and affluent rural areas where resilience is driven more by household wealth than a highly skilled, economically active population.