Experts rein back on forecasts of post-Brexit gloom

Tthe Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the British economy

Tthe Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the British economy

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Fears that Britain would plunge into recession in the wake of the vote to the European Union have receded although business leaders have warned a gulf in productivity and skills remains between most UK cities and their European rivals.

The Organisation for Economic Co-operation and Development (OECD) has raised its growth forecast for the British economy, months after warning the UK would be hit by an immediate shock following the Brexit vote.

But the majority of UK cities are lagging behind European competitors for skills and productivity, according to the Centre for Cities think-tank, which stressed the weaknesses must be addressed if cities are to attract industries offering long-term growth and prosperity.

“No other economy in Europe is so dependent on the performance of its cities, yet too many of the UK’s urban areas are failing to realise their potential,” said Alexandra Jones, the chief executive of Centre for Cities. “For the country to thrive in the years to come, it’s vital that the Government works with cities to address the skills and productivity gaps holding most places back.”

The Government should ensure its funding focus in the Autumn Statement is on boosting key drivers for growth, she added, such as skills, transport and housing.

She said: “Over the long-term, it should also build on its devolution agenda by giving places the powers they need – and which European counterparts already enjoy – to grow their local economies.”

The OECD report raises its growth projections for 2016 by 0.1 per cent to 1.8 per cent, highlighting a strong pre-referendum economic performance and the ‘prompt action’ by the Bank of England.

Growth next year would still be “well below” forecasts, it said, warning that a future trading arrangement with the EU and other countries will be “critical” to the UK’s economic prospects.

But a study, published today by Centre for Cities, shows that most UK cities – including in Yorkshire – are lagging behind European competitors. Leeds, while top for the North of England, is in the bottom half of European cities for productivity, the study found, while Sheffield is in the bottom 25 per cent.

“This report highlights what we have said for a long time, that the concentration of wealth, opportunity and power in London and the South-East is not beneficial for the whole country,” said Sheffield City Council Leader Julie Dore.

“If the government are to tackle these inequalities and genuinely rebalance the economy what we need to see is a Government committed to investing in our cities.”

Leeds City Council’s leader Judith Blake added: “The report echoes our calls for cities like Leeds to be given the powers and resources needed to generate growth and new jobs through a regional approach bringing people and businesses closer together. That is the key to realising our economic potential and re-balancing the economy nationally.”

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