Cambridge maintained its position as having one of the top three fastest growing economies in the first quarter of 2016, but according to analysis by Irwin Mitchell it is set to slow considerably in the next two years following the UK’s decision to leave the EU.
Law firm Irwin Mitchell’s UK Powerhouse study, which has been produced with the Centre for Economic and Business Research (Cebr), provides a forecast of GVA¹ and job creation within 38 of the UK’s largest cities.
In the most recent version of the report, Cambridge had the second fastest growing economy in the first three months of the year recording an impressive 2.4% respective year-on-year rise in output in Q1.
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Five fastest and slowest expanding cities by year-on-year GVA growth in Q1 2016
The report says that cities such as Cambridge continue to benefit from their relatively high share of service and knowledge based industries. It adds that it has been less impacted by the slowdown in sectors such as finance.
Following the UK’s decision to leave the EU, Cebr has revised growth rates to the 12 months to the start of 2017 from 2.6% to 1.1%. Cebr predicted that Cambridge’s economy would grow by 2.2% in the 12 months to Q1 2018 but has revised this downwards to 1.7%.
Despite the significant impact of the Brexit on the Cambridge economy, the study found that Cambridge’s economy was due to recover quickest and that by Q1 2018, it will be the fastest growing city out of the group of 38.
Niall Baker, CEO of Irwin Mitchell’s Business Legal Services division, added: “Dealing with this current economic uncertainty presents a tough challenge for many businesses and following Brexit, there could well be further instability.
“Although it's going to take some time to understand the full impact of the referendum result, many organisations are already considering a wide range of legal issues in order to ensure they’re as prepared as they can be for a future when the UK is no longer in the EU.”
Following the decision to leave the EU, Irwin Mitchell has developed a legal checklist that businesses should consider ahead of the date when the UK formally leaves the EU.
Irwin Mitchell produced its first UK Powerhouse report in October 2015. The report predicted a growing economic gap between the South East and the north of England and made nine policy recommendations along with a call for the government to radically rethink how it looks to rebalance the UK’s economy.
For further information and to download the latest version of the report, visit www.irwinmitchell.com/ukpowerhouse
¹ Gross value added (GVA) is a measure of the value of goods and services produced in an area