London's economy will continue to outpace the UK as a whole, according to new research.
A new report from Experian shows London's 3.4% rate of growth in 2004 led the south to recovery.
The Capital will maintain its expansion over the medium term, largely due to increased foreign finance, overseas tourists and an influx of skilled migrant workers.
The consumer slowdown that is spreading across the economy as a whole would be expected to hit England's southern regions hardest, Experian argued, with its large number of retailers, stretched housing markets and higher levels of indebtedness.
Manufacturing's troubles, weakened expansion in construction and the public sector, along with other industry factors, however, mean that the north will fail to overtake the south.
Experian predicted that consumer spending growth will fall to a 10-year low over the course of this year and, with predicted inflationary rises, will have consequences for the new Labour government.
"[Gordon] Brown's macroeconomic forecasts looked optimistic on Budget day and now lie well above the UK consensus," said Dr. Neil Blake, director of economics and forecasting at Experian.
"Slower than expected growth will worsen the UK's large fiscal shortfall and we believe that tax rises will now be unavoidable next March.
"This puts further pressure on incomes and means that consumer weakness is set to continue next year. But with interest rates easing, we expect UK activity to revive and to remain at or above its long-term trend over the medium term."
