THE economic gap between the North and South is widening, a report has revealed.

A survey for the Royal Bank of Scotland (RBS) highlighted differences in activity between areas of heavy industry and regions driven by the service industry.

The survey of company purchasing managers showed the problem of "two-speed Britain" worsening.

The South-East had the strongest rate of growth last month, with the weakest in the West Midlands and the North-East close behind.

The figures will add to concern that the North-South divide shows little sign of disappearing, despite hopes for more balanced economic growth.

Last week, Bank of England governor Mervyn King told The Northern Echo that the gap between North and South was the narrowest it had been for years.

But the RBS survey appeared at odds with that view.

The survey showed the rate of economic growth slowed in all regions last month, but that the South-East, South-West, East-Midlands and London remained buoyant.

London slipped from the top spot in January to fourth place last month as a result of a cooling house market.

Job creation rates also rose in the South but fell in the West-Midlands - the only area to see a fall.The data, produced by NTC Research, provided little hard evidence that the recent interest rates rises had had a significant impact on the rate of economic growth, RBS said.

RBS chief economist Jeremy Peat said the gap in the regional economic performance was disconcerting and was most likely the result of rising oil prices and the impact of a "soft patch" in US economic growth.

He said the figures showed that the overall pace of growth across the UK was robust.

Mr Peat said: "When US-led demand re-accelerates, we are likely to see an upturn in the manufacturing-orientated regions, which should, in turn, lead to a more balanced picture of regional growth.''

The survey backs projections last month from Experian, the economic consultancy, warning that the gulf between the UK's rich and poor regions is set to become the widest in Europe.