Finance
UK commits to 45 billion-pound rail project for northern England
Published by Global Banking & Finance Review®
Posted on January 13, 2026
3 min readLast updated: January 19, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 13, 2026
3 min readLast updated: January 19, 2026
The UK unveils a £45 billion rail project for northern England to enhance regional connectivity and address economic disparities.
By Andy Bruce
MANCHESTER, England, Jan 13 (Reuters) - Britain on Tuesday committed to a new rail infrastructure programme worth up to 45 billion pounds ($60 billion) for the north of England, a region long held back by underinvestment.
The government said it pledged to deliver Northern Powerhouse Rail in three phases, starting with improved connections between the Yorkshire cities of Sheffield and Leeds, Leeds and York, and Leeds and Bradford.
That will be followed by a new railway line between Liverpool and Manchester, running via Manchester Airport, and then improved connections between Manchester and Yorkshire.
British cities outside the capital suffer a bigger shortfall in productivity compared with their counterparts in other countries, with outdated and limited transport links identified by organisations such as the OECD as a key factor.
Rail links in the north, home to three of the five largest metropolitan areas in England, are plagued by bottlenecks on lines that date back to the Victorian era.
Prime Minister Keir Starmer's Labour government, lagging far behind the right-wing Reform Party UK in opinion polls, has said reducing regional inequality between London and the rest of the UK is a top priority.
"If economic growth is the challenge, investment and renewal is the solution. That's why we're reversing years of chronic underinvestment in the North," said finance minister Rachel Reeves.
Most of the spending - capped at 45 billion pounds in constant prices - will take place in the 2030s and 2040s. There will be no binding dates for opening, a lesson from the HS2 high speed rail project that was cut short due to ballooning costs.
In October 2023, the Conservative prime minister at the time, Rishi Sunak, cancelled the northern leg of HS2 as costs soared and the infrastructure watchdog warned there was a fundamental problem with Britain's ability to manage such large projects.
The government on Tuesday said it intended to build a new railway line between Manchester and the central English city of Birmingham after completion of Northern Powerhouse Rail, although it would not be a "reinstatement" of former HS2 plans.
It said it was learning the lessons of the HS2 failures, which will now run only between London and slightly north of Birmingham and open sometime beyond the 2033 opening date previously targeted.
($1 = 0.7448 pounds)
(Reporting by Andy Bruce; Editing by Alison Williams)
Investing in rail infrastructure is crucial for enhancing productivity and economic growth in regions that have historically faced underinvestment, particularly in the north of England.
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