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Brexit will hit southern regions hardest while 'vote leave' areas to be least affected

Aberdeen will be the single city most affected by both a hard and a soft Brexit, the study predicts (© Persley Photographics via Getty Images)

Southern towns and cities are likely to be hit hardest by the UK’s departure from the European Union, while poorer regions which largely voted for Brexit will be the least affected.

Even areas that will feel a minimal impact from Brexit, will still see economic output negatively affected, findings reveal.

A study published by independent think tank, Centre for Cities, showed that successful cities with a thriving high-skilled sector, mostly positioned in the south, were most likely to be affected because of a loss of output resulting from a predicted increase in trade costs post-Brexit.

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The think tank which is part the London School of Economics’ Centre for Economic Performance,  analysed the potential impact of both a so-called ‘hard’ and ‘soft’ Brexit on British cities in the 10 years following the implementation of new trade arrangements with the EU.

The economic impact will be almost twice as big in the event of a ‘hard’ Brexit, which the research predicted will bring an average 2.3% reduction in economic output across all UK cities – compared to a ‘soft’ Brexit, which will result in a 1.2% decrease.

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However, out of all the cities listed, Aberdeen is expected to fare the worst, with a predicted 3.7% fall in economic output in the event of a hard Brexit and a 2.1% drop should a soft Brexit occur.

Top 10 cities most affected by a hard and soft Brexit (Centre for Cities)

In contrast, the study noted that the regions least directly impacted by either Brexit scenario are also those that are less prosperous, such as cities in the North, Midlands and Wales. These regions are often dubbed the UK’s ‘left behind’ places and credited with driving the vote to leave the EU.

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Largely characterised by low numbers of high-skilled firms and workers, and smaller knowledge-intensive private sectors – they are both less vulnerable to the predicted post-Brexit downturn, but also less well-equipped to respond to the economic shocks ahead.

How the UK voted in the EU Referendum (University of Oxford)

Professor Stephen Machin, from the Centre for Economic Performance, said: “A hard Brexit would amplify the negative impact of leaving the EU on local economies across the UK. The estimated decline in economic activity is higher in richer local economies like London. But Brexit – whether hard or soft – would still hurt economic activity in poorer areas like Hull and Burnley that have some of the lowest incomes in the country.

“The fact that the industrial specialisation and the skill and knowledge intensity of different places are key to local impact should be of significant importance to the design and implementation of policy, especially in the arenas of industrial, skills and labour market strategies.”

Top 10 cities least affected by a hard and soft Brexit (Centre for Cities)

But despite the expected shocks, the report also argued that the most-affected cities are also best-placed to respond to economic wobbles ahead.

“Places such as London, Reading and Aberdeen are home to large highly-skilled labour markets, significant numbers of innovative firms and strong business networks – all of which are crucial in enabling a city to reinvent or adapt its industrial structure to changing economic circumstances,” the think tank said.