North-South divide set to widen after Brexit

The regional divide between north and south will widen after Brexit, according to a new study.

The UK Powerhouse study by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), claims in particular the economic gap between the South East and the North will widen one year after Britain leaves the EU.

According to the report, Milton Keynes, Reading and Oxford will be the top three locations for economic growth in the final quarter of 2020.

The report also claims no cities or areas in the North or the Midlands will make the top 10 for growth in that period.

Instead, it predicts that the 10 slowest growing locations in the final quarter of 2020 will be dominated by locations outside of the South East with the bottom five comprising of Sunderland, Wolverhampton, Hull, Middlesbrough and Derby.

Out of the five sectors studied in the survey – manufacturing, retail, construction, financial and business services, and hospitality – the hospitality sector has the highest share of non-UK EU workers who could be affected by Brexit.

It also warns that the automotive industry faces significant problems after Brexit, with 51% of all UK-built cars being bought by customers in the EU in 2018.

‘Economic growth in even the fastest growing cities is set to slow in the year after Brexit,’ said Cebr senior economist, Josie Dent.

‘In Q4 2018, the fastest growing city – Reading – is estimated to have seen annual growth of 2.7%, while in Q4 2020 Milton Keynes is set to grow at the highest rate, but will only see a 2.1% increase.’

In April, council leaders called on the government to guarantee the new UK Shared Prosperity Fund will not leave some regions worse off when Britain leaves the EU.

The authorities signed a joint statement, which asks for the fund, which will replace EU regeneration grants after Brexit, to be adequately resourced and appropriately devolved.

Irwin Mitchell’s chief executive of business legal services, Victoria Brackett, added: ‘Brexit has and will continue to take up a lot of Government time, but it is vital that it refocuses its attention on rebalancing the UK economy.

‘Our latest report reveals that very little has changed in terms of economic growth and looking further ahead, locations in the South East are expected to continue growing at a much faster rate.’

Photo by stux (Pixabay)

Jamie Hailstone
Senior reporter - NewStart


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