- On August 2, 2017
Richer cities in the South East, including neighbouring Reading, will potentially be the hardest hit by Brexit, according to a study by the London School of Economics (LSE).
The report, by the LSE’s Centre for Economic Performance in conjunction with the Centre for Cities think tank, said areas which specialised in services will be particularly affected.
The study examined the predicted effects under both ‘hard’ and ‘soft’ Brexit scenarios and whether voting patterns from last June’s referendum correlated with the predicted impact.
Outside of London, Reading came third in the table of most affected local authorities, under Mole Valley and East Hertfordshire, if there was a ‘hard’ Brexit.
Under a ‘soft’ Brexit, Reading was fifth in the table, with Aberdeen, Worthing, Swindon and Slough the cities likely to be affected more.
Every local authority area, the study found, is predicted to see a fall in Gross Value Added (GVA) as a result of Brexit, with the impact more negative under a ‘hard’ Brexit.
In Reading’s case, this is predicted to be -2.8% under a ‘hard’ Brexit and -1.4% under a ‘soft’ Brexit.
Richer cities tend to specialise in financial and business services which could be hit by potential the increases in tariff and non-tariff barriers Brexit could bring, the report stated.
The report urges the Government to “consider the spatial implications of deals negotiated and support cities to adapt to changes in the UK’s international trading relationships.”
It goes on: “Cities should combine this insight with local knowledge to consider how approaches to local economic development should be restructured.”
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