Birmingham’s Economic Growth Will Struggle To Keep Pace With The South East Post-Brexit

The UK Government must redouble its efforts to rebalance the economy after a new report predicts a widening gap between the South and the Midlands 12 months after the UK’s expected departure from the EU.

The UK Powerhouse study by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr), predicts that in 2020 Q4, annual GVA* growth for Birmingham  will be 1.3%, putting it in 22nd place in the study’s league table. Coventry is expected to record even lower growth at 1.1%.

Milton Keynes, Reading and Oxford will be in the top three for economic growth with no locations in the Midlands in the top 10. The annual GVA growth of these three South East locations at 2020 Q4 will be around 2%.

The forecasts are based on the assumption that an amended version of the Brexit withdrawal agreement will form the basis of the future UK – EU relationship. It also assumes a transitional arrangement will be put in place that allows a continuation of the current relationship without any major disruptions until at least 2021.

There was better news in terms of employment for Birmingham with the city appearing 6th in the league table for job creation.

Expert Opinion

“This report paints a mixed picture for Birmingham. 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 and building on the potential within the Midlands Engine.” Chris Rawstron - Partner

Methodology note

All forecasts in this report utilise Cebr’s central scenario. Cebr’s central forecasts are based on the assumption that an amended version of the Brexit withdrawal agreement will form the basis of the future UK – EU relationship. We further assume that a transitional arrangement will be put in place that allows a continuation of the current relationship without any major disruptions until at least 2021. On the immigration policy, we rely on the lower immigration population estimates assuming that a visa system will be implemented for EU nationals, but that the requirements (e.g. the minimum salary, the NHS surcharge payment, the application fees, etc.) would be more relaxed than they currently are for non-EU nationals requiring a visa. 

* Gross value added