Norwich may have beaten Ipswich at footie, but our economy looks set to outpace theirs

Ipswich Aerial. Picture: Ed Taylor r_e_d_r_o_c_k_e_t

Ipswich Aerial. Picture: Ed Taylor r_e_d_r_o_c_k_e_t - Credit: Archant

A new study predicts that Ipswich’s economy will be the fifth fastest-growing in the UK six months after Brexit.

The UK Powerhouse study, by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr) predicts what the impact of Brexit will be on the economy.

The national study highlights Ipswich as being on the same footing as Cambridge, Reading, Oxford, and Milton Keynes as one the fastest growing cities in the UK.

Assuming Theresa May gets her withdrawal agreement through Parliament, it says that Ipswich’s GVA (the value of goods and services produced there) will grow by 1.9% in the 12 months to the end of September this year.

In comparison, Norwich’s economy is expected to grow by only 1.7% in the same period.

However, the fast growth in Ipswich will not translate into a significant increase in jobs, with the report predicting that employment levels will only increase by 400 between the third quarter of 2018 and the same period of 2019.

And if there is a ‘no-deal’ Brexit on March 29, as looks increasingly likely, GDP and business investment growth are both set to see sharp declines in the short term. At their lowest points, GDP is expected to contract 0.2% while real business investment falls by 8.4%.

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UK Powerhouse assesses the impact on GDP, population, unemployment, consumer spending, business investment, exchange rates and Bank of England rates on the UK’s economy between now and 2034, based on the outcome of Brexit.

According to the study, after 2019, unemployment will initially increase in all potential Brexit forecasts. However, even at its highest in the downside scenario, unemployment will remain 1.8 percentage points below its peak during the financial crisis.

Josie Dent, economist at Cebr said: “With uncertainty still surrounding what the deal – or indeed lack of deal – between the UK and EU will be on departure day, Cebr’s economic forecasts under different scenarios highlight the impact that Brexit could have on the economy, finding that business investment is set to suffer in particular in the months following a potential no-deal Brexit. However, our models show that the UK labour market in a no-deal scenario is more resilient than some expect, as the changing nature of employment means firms can be more flexible and adjust without the need to fire employees.”