Mark Whitehead 27 July 2017

Prosperous cities to be hit ‘hardest’ by Brexit, think tank says

Prosperous cities to be hit ‘hardest’ by Brexit, think tank says  image

Relatively prosperous cities will be hardest hit by the 'economic shock' of Brexit, according to researchers.

But the Centre for Cities and the Centre for Economic Performance say places such as London, Reading and Aberdeen will be better able to adapt to a likely downturn in trade as they have large highly-skilled labour markets, innovative firms and strong business networks.

Less prosperous cities in the North, Midlands and Wales, with fewer high-skilled firms and workers and smaller knowledge-intensive private sectors will be least directly affected.

The research shows that all British cities are set to see a fall in economic output as a result of Britain leaving the EU because of the predicted increase in trade costs.

It predicts a ‘hard’ Brexit will cause an average 2.3% reduction in economic output across all UK cities compared to a ‘soft’ Brexit which will result in a 1.2% decrease.

Andrew Carter, chief executive of Centre for Cities, said: 'Contrary to much of the received wisdom on Brexit, it is the most prosperous UK cities which will be hit hardest by the downturn ahead – but poorer places across the North and Midlands will find it tougher to adapt.

'First and foremost, the Government should do all it can to minimise the coming economic shocks by securing the best possible trade deal with the EU.

'That means ensuring that our post-Brexit trading arrangements are as close to our current relationship with Europe as possible.  

'But it’s also critical that the Government uses its forthcoming industrial strategy to give cities across the country the investment, powers and responsibilities they need to make their economies as successful and competitive as possible.'

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