Britain's north-south economic divide is about to reach its narrowest point for seven years, according to the latest research.

Business Strategies says growth rates in the north are likely to be just 0.7% below those in the south over the coming months.

Southern regions, below an imaginary line from the Severn to the Wash, are set to grow by an average of 2.1% this year.

Those to north are forecast to grow by 1.4%.

The difference is the narrowest since 1995 and a significant improvement on last year's 2.7% gap which was the widest for more than 10 years.

The divide is expected to narrow even further in 2003, with growth of 2.9% in the north and 3.3% in the south.

Business Strategies said the narrowing was being caused by a slowdown in household spending, which was affecting the south more than the north.