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Cambridge and Luton set to shine as region’s economy grows

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The East of England economy will expand at a faster rate than previously expected over the next three years although fractionally below the national average, according to forecasts from EY. Luton and Cambridge are expected to outpace the region’s growth with gva per year of 2.3% and 2.0% respectively with over half of Cambridge’s growth in the next three years is set to come from ICT and professional services.. The forecasts predict that the East will average 1.7% gross value added (gva) per year until 2020, up from the 1.4% previously expected, and equal to the South West and East Midlands. But growth in the East will be slightly below the South East (2%) and West Midlands (1.8%) as well as the UK average of 1.8%. Total employment in the East of England is expected to increase by 0.4% per year until 2020 – in line with the UK average.

Nick Gomer, managing partner at EY in the East, said: “The East of England is forecast to grow at a faster rate than the majority of UK regions, with only London, the South East and Midlands’ economies growing ahead. Previous forecasts have set the region’s growth at 1.4% so it’s positive to see the East of England exceeding this – up to 1.7% per year until 2020. The performance of Luton and Cambridge illustrates the importance of sectors in determining growth prospects and the economic performance of UK cities.”

Nick Gomer, continues: “The UK has made little progress on regional rebalancing over the past three years, and we expect more of the same leading up to 2020. In fact, we expect that some of the fastest growing regions over the next three years will be the four most southerly ones, London, the South East, the South West and the East. This means that the economic gap between North and South could be larger in 2020 than it was in 2010.”

The report predicts a generally weaker pace of growth for cities outside of England with the majority growing slower than the overall rate of UK GVA growth between 2017 and 2020. Edinburgh is an exception to this trend, with GVA forecast to rise by 2.1% per year on average and total employment forecast to rise by 0.9%.

The performance of Reading, Cambridge and several other southern cities highlights the importance of sectors in determining growth prospects in the short to medium-term. The report forecasts that the GVA of the information and communications sector and professional services sector will grow by 3.5% and 3.4% per year, respectively, over the next three years. Over 50% of Cambridge’s growth in the next three years is also forecast to come from Information and Communications Technology (ICT) and professional services.

Nick Gomer, adds: “The Government’s recently published proposals for the UK’s industrial strategy are a welcome development and demonstrate how sectors will be key drivers of both productivity and the economy as a whole. The focus on manufacturing will help support many regions and cities that are located outside of the South East, including the East."


Last Updated ( Wednesday, 13 December 2017 08:00 )