The study by the Centre for Cities think-tank, supported by the Department for Transport (DfT), argues that improving connections between the north of England’s two biggest cities would build a more attractive business environment with a better capacity to drive prosperity.
It also recommends better public transport links within the UK’s biggest cities outside London.
According to the report, the DfT asked Centre for Cities to decide "which city to city transport investments should take the greatest priority, based on the performance of the current links between these cities and the economic performance of these cities".
The report argues that linking cities with faster, more frequent transport services enables businesses to collaborate and share knowledge, networks and services.
For workers, these connections provide access to a larger pool of job opportunities, and allows greater flexibility in where they can live and work.
To have the greatest impact, transport nodes are best placed in city centres "where the density of economic activity is greatest", the document says.
But the report found that, in terms of both speed and frequency, connections between cities in the Midlands, North and Scotland "trail well behind" those between London and other cities.
At peak morning times, it says, there are only four services travelling from Manchester Piccadilly and Leeds stations that take 49 minutes to cover a distance of 43 miles.
In contrast, there are seven or more services from London Euston to Milton Keynes, which each taker 30 minutes though it covers a longer distance of 50 miles.
The most effective improved inter-city rail connection in terms of boosting economic growth, the study finds, would be between Manchester and Leeds, because it would link high-skilled local workers to 90,000 well-paid, productive professional jobs in the two cities.
The report recommends that the DfT "prioritise the improvement of the existing rail links between Manchester and Leeds … based on the economic scale of these cities and the performance of the rail line that links them".
Secondly, it urges the DfT to examine how to improve transport links within the largest cities outside London, where public transport "is much less well developed", to "reduce the costs of commuting into their city centres".
This would "better connect people to jobs" and "should be seen as a priority by both local and national government".
The report comes after chancellor George Osborne announced in June that the government supported the creation of a 'Northern Powerhouse' in which Liverpool, Manchester and Leeds would be connected by a new high speed rail line.
Alexandra Jones, Centre for Cities chief executive, said: "The Manchester to Leeds route currently takes almost twice as long to travel as the longer distance between London and Milton Keynes.
"The capital’s rail connections to neighbouring cities have played an important part in building strong and successful economies across the South East, and the evidence strongly suggests that Manchester and Leeds would benefit enormously from quicker and more frequent connections.
"This is a critically important, well-overdue upgrade that should be the first stage of delivering on the government’s ambition to build a Northern powerhouse."
Jones added: "There is no doubt that the UK has pressing infrastructure challenges, and in a time of continued fiscal constraint, government must phase investment, prioritising areas where it can have the greatest impact."
The findings of the report were welcomed by the Campaign for Better Transport, whose chief executive Stephen Joseph, said: "This welcome report adds to the growing pile of evidence that better public transport within and between cities is a key element of regenerating the north of England."
Joseph said he hoped the report could persuade the DfT to "come forward with a proper investment programme for railways in the North, replacing old trains, improving stations and increasing the speed and numbers of services between and within the cities of the region".
Fast Track to Growth – Transport Priorities for Stronger Cities can be read here.