The division in wealth between the affluent South East and London, and the rest of the country is to be bridged by provincial areas as significant UK saving and investment is made into them, according to a report produced for SG Hambros.

Increasing property prices and strong entrepreneurial activity entail that the regions are narrowing the economic gap, with the North West particularly well placed to reap the benefits of significant UK investment in the region.

The creation of new firms will be fastest in the East Midlands, while house prices will take off most spectacularly in the North East as people make their saving and investment in property there.

The report found that there is no doubt that London and the South East will remain the wealthiest region, but that growth in the provinces will reflect a “changing pattern” of enterprise enabling them to narrow the wealth gap and to attract saving and investment resources.

Phil McIlwraith, deputy managing director of SG Hambros, said: “Rising costs have led to a number of firms establishing their bases away from the capital.

“These firms will be able to take greater advantage of the lower operational costs, better quality of life and improved transport links that living and running a business outside London affords them.”