Sheffield's economic growth forecast halved in wake of Brexit vote
Growth predictions for Sheffield's economy have been more than halved in the wake of the Brexit vote.
Research by the Centre for Economic & Business Research and national law firm Irwin Mitchell has estimated that the city’s economy is now expected to grow by 0.4 per cent up to the first three months of 2017 - down from the 1.4 per cent that was predicted if the UK had not decided to leave the EU.
The Cebr said falls in business and consumer confidence will have a ‘profound impact’ on the city’s economy in the short-term.
Looking further ahead, the analysis found that the Sheffield economy’s growth is due to rise to 0.9 per cent in the 12 months to the first quarter of 2018 - still below the 1.2 per cent growth predicted before the outcome of the referendum was known.
The report, which analyses job creation prospects and what goods and services are produced in an area, examined 38 of the UK’s largest cities.
It suggested other northern cities such as Manchester and Leeds will also face slowdowns in economic growth.
Sam Alderson, an economist at Cebr who produced the report, said: “The declines seen across the cities largely mirror the likely slowdown in the UK economy in the wake of Brexit.
“Whilst the falls in the value of the pound seen since the referendum should help to boost the competitiveness of exports, the falls in consumer and business confidence seen in the weeks that have followed the result will have a profound impact on the city’s economy in the short-term.
“Both of these channels will lead to lower levels of demand for the goods and services across the economy.
“With cities such as Sheffield forming important retail centres, economic activity will be directly impacted by a slowdown in the consumer side of the economy.
“Additionally, as with many other cities, inward investment both domestically and overseas is likely to be impacted in the short-run.”
The report comes after a separate report said UK economy has slumped at its fastest rate since the financial crisis in the wake of Britain’s vote to leave the European Union
The closely-watched Markit Flash UK Composite Output Index plummeted to its lowest level since April 2009, falling to 47.7 in July, compared to 52.4 in June.
A reading above 50 indicates growth.
The sharp contraction was triggered by falling output and orders for the first time since the end of 2012, while business optimism in Britain’s powerhouse services sector hit a seven-and-a-half-year low.
But the Bank of England has said there is ‘no clear evidence’ of a sharp economic slowdown following the referendum result.