A GLOOMY picture of economic growth in Yorkshire next year has been painted in a new report which foresees a return to the North/South divide, though less pronounced.

Forecasters at HSBC bank say that while growth in the region at little more than two per cent has for once been keeping pace with the UK as a whole, this is unlikely to be sustained into 2005.

In recent years the Yorkshire region has tended to underperform against the UK as a whole. For example, the contribution that each individual in the county has yearly made to the county is £12,500 a year - only 86 per cent of the national average, states the report.

And while the focus of economic activity regionally has shifted towards the service sector, growth rates have been dragged down by a heavy concentration of declining industries.

But last year Yorkshire's economic expansion managed to stay in line with the nation's at a little more than two per cent.

"A recovery in manufacturing will help to keep the overall growth rate above two per cent in 2004, but that is unlikely to be sustained into the following year," says the report.

Meanwhile, say the HSBC economists, last year regional growth trends were turned on upside down - with London, normally one of the fastest growing regions, now one of the slowest, while the North East, usually worst performer now one of the best and with strongest performance in employment and house prices.

But this year, they say, the north/south divide will be back, though less stark than before.

It will be the effect of "a deceleration in consumer spending in the south balanced by a combination of factors affecting the north - including a slowing of job creation and a lack of inward investment."

Updated: 10:12 Tuesday, April 20, 2004