London to lose 150,000 jobs this year as Northern cities grow

·2 min read
Empty London street
Empty London street

Solihull and Warrington will be the UK’s fastest-growing towns by the end of the year as Covid-19 leads more people work from home, a new study suggests.

London, meanwhile, will be home to the biggest employment casualty of the pandemic. The end of the furlough scheme and the impact of the Brexit deal will cost London more than 150,000 jobs by the end of the year with a 3.9pc fall in employment to 3.7m, according to the latest UK Powerhouse research compiled by the Centre for Economics and Business Research and law firm Irwin Mitchell.

Official figures already show London has the highest unemployment rate of any UK region, at 7.2pc. The capital is also the most furloughed region in the country with 710,000 workers in the scheme at the end of February.

The picture is much brighter elsewhere in the country, however, with Solihull and Warrington the biggest beneficiaries of lifestyle shifts in the wake of Covid-19.

By the end of 2021 the two towns will be growing at an annual pace of 7.7pc, the study of the UK’s 50 biggest towns and cities estimates.

Leafy Solihull will grow faster than its bigger neighbour Birmingham as “instead of commuting every weekday, many residents will work from home and engage in activity in the local area, even once the pandemic is over”, the report claims.

Local MP Julian Knight said the study was a “huge vote of confidence”, adding: “We know that growth spreads from Solihull to more deprived areas, creating a halo effect, and this is why I think it is a mistake if the Government only focuses on so-called ‘red wall’ areas.”

Warrington, sitting between Manchester and Liverpool in the North-West, is expected to benefit from similar trends.

Josie Dent, the CEBR’s managing economist, said: “The impacts of the pandemic have not been equal across the country. Cities with large hospitality and entertainment industries have been hit hard by forced closures amid lockdowns and could face additional difficulties with the end of the furlough scheme in September.

“Meanwhile, the UK leaving the EU has caused further disruption in 2021, with London being particularly badly affected due to the city’s large services sector which is not covered by the trade deal signed in December.”