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Slower growth forecast to hit UK regions and cities

Words: Huw Morris

None of the UK’s regions or cities will be immune to slower growth over the next three years, with little progress to be made on rebalancing the economy.

Latest forecasts by accountancy firm EY predict London and the South-East will be the joint-fastest growing regions up to 2019 with gross value added (GVA) of 1.9 per cent a year.

Reading is set to be the UK’s fastest-growing city outside the capital in the next three years with GVA of 2.5 per cent compared with the UK average of 1.5 per cent.

Manchester and Leeds will outpace their regional performance with employment growth of 0.7 per cent and 0.3 per cent a year respectively until 2019.

The forecast says the East of England (1.4 per cent), South West (1.3 per cent) and Yorkshire & Humber (1.3 per cent) are also expected to outperform other UK regions between up to 2019, boosted by their strengths in key sectors such as professional and administrative services, and information and communications.

The slowest regional growth levels are expected in the North-East (0.7 per cent), Scotland and Wales at 1.0 per cent GVA respectively over the next three years. The North-East has experienced employment losses in the accommodation, food, health and social work sectors, whilst Scotland’s economy continues to be hit by North Sea activity and the falling oil price.

In Wales, the relatively heavy reliance on the public sector is cited as a potential source of vulnerability.