The imbalance between London and the rest of the U.K. has never been starker, and that disparity is widening.
Oliver Harvey, macro strategist at Deutsche Bank uses the chart below, which contrasts the economic output per person – what's called gross value added (GVA) – per London resident with the rest of the U.K., to argue that London may be part of a "flawed currency union" with the rest of the U.K.
"In many ways the U.K. fares worse as a currency area than its largest trading partner, the euro zone, which is commonly criticized as an experiment in monetary union gone wrong. This is the result of the differences that exist between one U.K. region, London, and the rest of the country," Harvey wrote.
According to the graph below, the gap between the GVA per person in London and the rest of the U.K. has grown massively in 14 years. In 1997 the average Londoner's GVA was about 9,000 pounds ($14,000) while the rest of the UK's figure was about 4,000 pounds. But by 2011, the London figure was more than twice that of the rest if the UK's average – nearer 18,000 pounds compared with about 7,000 pounds.
London accounts for 13 percent of the GVA to the U.K. economy each year – in comparison, New York accounts for 7 percent of the U.S. GVA.