Milton Keynes ‘will lead UK’s post-Covid economic recovery’
New report predicts that Buckinghamshire town will have country’s fastest growth rate in 2021
Milton Keynes will have the fastest economic recovery rate of any town or city in Britain next year, thanks to the boom in online shopping, according to a new report.
The Buckinghamshire town has been the “butt of endless jokes over its roundabouts and concrete cows”, but is set to have the “last laugh”, The Telegraph reports.
The newly published UK Powerhouse report, by the Centre for Economics and Business Research and law firm Irwin Mitchell, forecasts that Milton Keynes will enjoy a 9.9% bounceback in annual gross value added (GVA) over the next year, following an expected 10.7% contraction in the year to Q4 2020.
Like the other 45 key towns and cities analysed by the report authors, Milton Keynes has suffered “Covid-19 related blows”, but its status as a distribution hub for online shopping is “fuelling the recovery”, adds The Telegraph. The town’s Magna Park is home to vast logistics sheds for companies including Amazon, Marks & Spencer, John Lewis and Adidas.
“The economic make-up of Milton Keynes is heavily skewed towards services, especially highly skilled service sectors, such as IT and business services, as well as distribution and storage,” says the report. “Many businesses in these sectors have struggled amid the pandemic.
“The June closure of Adelie Foods, one of the UK’s largest sandwich makers, highlighted the challenges businesses have faced. It cost more than 2,000 jobs in the Milton Keynes area. Yet a key sector of growth as the UK emerges from the pandemic will be in logistics and online retail, reflecting the change in consumer shopping patterns.”
The Berkshire town of Reading is flagged as another likely winner of demand for IT and tech services, with the report authors predicting that it will have “the strongest employment growth coming out of the coronavirus crisis, with 6.6% growth and 10.0% annual growth in Q2 and Q4 2021 respectively”.
Overall, the UK economy grew by 15.5% in Q3 this year, compared with the previous three-month period. The strong uptick in growth follows a record contraction of 19.8% in Q2 2020.
In 2021, the average annual GVA growth across the towns and cities covered in the UK Powerhouse report is expected to be 23%, while the change in employment is forecast to be -0.7% year-on-year.
Meanwhile, the unemployment rate is expected to peak at around 7% at the end of Q2 2021. “Ending the furlough scheme in March 2021 is expected to have far less impact than it would have done in October 2020,” the report adds.