City economy set to grow this year

Peace Gardens, Sheffield city centre
Peace Gardens, Sheffield city centre
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Economic growth in Yorkshire’s largest cities will increase slightly in 2016 according to a new report which also highlights that the Government’s flagship ‘Northern Powerhouse’ initiative is still struggling to gain traction.

In Sheffield, where year-on-year growth up to quarter three of 2015 was 1.6 per cent, gross value added - income - is expected to increase by 1.8 per cent during 2016 to hit £11.2bn.

The study reveals that Leeds grew by 1.9 per cent in the 12 months to Q3 in 2015 but this is expected to increase to two per cent in 2016.

The total value of the goods and services produced in Leeds is expected to increase to £20.2bn in the next 12 months.

Sheffield and Leeds bucked the trend compared to some other cities in the North such as Greater Manchester and Liverpool where the rate of growth is expected to fall in 2016 compared to 2015.

In contrast, London’s economy recorded 3.1 per cent growth in the 12 months to September 2015 and although this is set to fall this year to 2.7 per cent, it continues to outperform key cities of the ‘Northern Powerhouse’ region.

Law firm Irwin Mitchell’s UK Powerhouse report, was produced with the Centre for Economic and Business Research.

It forecasts that in 10 years, London’s economy will have grown by 26.9 per cent.

Over the next 10 years Greater Manchester’s GVA is predicted to grow by 18.3 per cent with Leeds and Liverpool growing by just under 18 per cent, Sheffield 15 per cent and Newcastle posting a 17 per cent increase.

The value of the economic gap between London and the northern region currently stands at £62billion and is expected to reach £115.3billion in 2025 according to the study’s latest analysis.

Paul Firth, regional managing partner of Irwin Mitchell said: “The information provided by our latest tracker also shows that there is still much to be done to tackle the North-South divide and it’s vital that more is done now before it is too late.”