ECONOMIC output in the North-East grew at twice the rate of London’s last year – prompting claims that it is finally “catching up”.

Official figures showed the ‘gross value added’ (GVA) per person rose by 1.4 per cent in 2012, ahead of the UK average of one per cent.

That increase was twice the 0.7 per cent increase in London and was beaten by only two regions, the South-East (2.5 per cent) and North-West (1.7 per cent).

However, the statistics also showed that the number of jobs in the North-East actually fell by 2,000 in 2012, while rising sharply in other regions.

Nevertheless, the North-East Chamber of Commerce (NECC) hailed the figures as a “fantastic achievement” which its survey suggested had continued into this year.

Ross Smith, its director, said: “This is a good indicator that we are catching up with the rest of the UK after some incredibly tough years.

“NECC has called for more support for us to realise our undoubted economic potential. This is evidence that, if we receive that backing from the Government, we will deliver.

“With the major infrastructure projects planned across the region over the next two years, I can only see us closing the gap between ourselves and the rest of the UK even more.”

That message was echoed by James Wharton, Conservative MP for Stockton South, who said: “This is a positive sign, alongside falling unemployment, that our regional economy is turning the corner.

“There is still a lot to do to get things back in track but, with steel making back in Teesside, Nissan’s expansion plans and the promise of huge investment from Hitachi at Aycliffe, there are reasons to be optimistic for the future.”

The bulletin, from the Office for National Statistics (ONS), showed the overall GVA rise in London (two per cent) was higher than in the North-East (1.7 per cent).

But it believes a more meaningful statistic records output changes per head, ignoring increases in population.

On that measure, Yorkshire’s economy grew by only 0.4 per cent, while both it and the North-East outstripped stagnant Scotland (0.1 per cent).

However, the figures also underline the vast gulf in output-per-head between the North-East (£16,091), Yorkshire (£17,556) and London (£37,232) and the South-East (£23,221).

Furthermore, other ONS statistics yesterday underlined how people in the North-East are still feeling the pinch, recording sharp falls in the amount spent on luxuries.

The average weekly spend on alcoholic drinks in the region was £6.80 for a household - down by 62p compared with 2011, after adjustment for inflation.

Even the average weekly spend on food, excluding alcohol, fell by 30p per household, to £43.40 a week.

But the average weekly cost of rent soared from £96 in 2011 to £132.20 in 2012, an increase of more than third.