Cambridge leads East of England growth march as North-South divide widens
Driven by the Cambridge technology and life science sectors, the East of England is set to help lead strong growth in the UK economy in the next three years as the country’s North-South divide widens further. EY’s regional economic forecast says this region will march stride by stride with London and the South East to grow GVA by 1.8 per cent from 2020-2023 while some UK regions struggle to stay the pace.
Cambridge has been revealed as one of the stand-out locations with projected GVA growth of two per cent, confirming the role of strong high-end services progress in driving differential city performance.
This compares to other towns in the region, Peterborough (1.9 per cent), Bedford (1.6 per cent), Southend (1.6 per cent) and Norwich (1.5 per cent).
EY’s fifth economic forecast for England’s regions, cities and towns warns that imbalances in growth between different places within regions will also continue to increase, with larger cities pulling further away from towns and other smaller neighbours.
Gross Value Added in the largest cities in England is expected to grow at 2.2 per cent annually on average compared to growth of 1.6 per cent for towns. In Cambridge, GVA is expected to expand at an average annual rate of 2 per cent over the next three years and employment to grow by 1.1 per cent per annum.
This contrasts to the North East and the South West, which are expected to be the slowest growing locations, with GVA growth per annum of 1.1 per cent and little employment growth across both regions.
Stuart Wilkinson, office managing partner at EY in the East of England, said: “The East of England is punching above its weight where growth is concerned and its great news that the region is predicted to be one of the fastest growing regions in the UK.
“However, it is worrying that Cambridge’s performance is not being mirrored in all parts of the region. There is considerable fragmentation across the region, with the city operating as a successful standalone location but having limited connection to the wider region. The other cities in the region don’t currently show the same levels of growth as Cambridge.
“The forecast emphasises the difficulty facing the Government and just how important the policy announcements in the Budget will be. Despite the launch of at least 40 geographic policy initiatives over the last five decades, the UK remains one of the most regionally imbalanced of developed economies.
“Much is said of the need for rebalance, and a levelling up, to tackle the North/South divide, but as is evident in this latest economic report there is also a need for regions such as the East of England to tackle a macro-economic divide to create wider prosperity and economic growth opportunities across the whole region. If we are to succeed in levelling up the economy a more radical approach is now urgently required.”
Cambridge is set to be the sixth fastest growing location per GVA while the top three predicted sectors for GVA growth in Cambridge are, professional, scientific & technical activities (3 per cent), administrative & support services activities (2.4 per cent) and real estate activities (2.4 per cent).