Aberdeen will be the UK’s worst affected city when it comes to the economic repercussions of Brexit, according to a new report analysing the impact of EU withdrawal.
Edinburgh will also among the cities hardest hit when the UK leaves the European Union.
Research by the Centre for Cities and the Centre for Economic Performance predicts that cities with large highly skilled service sectors will have the most to lose. Aberdeen came top and Edinburgh came sixth in a league table ranking UK cities who stand to struggle as a result of Brexit.
Regardless of whether there is a hard or soft Brexit, both Scottish cities were ranked one and six when it came to forecasts of the reduction in economic output as a result of leaving the bloc.
Aberdeen, the UK’s oil capital, is set to see economic output reduced by 3.7 per cent in the event of a hard Brexit.
As the sixth worst affected, Edinburgh would see a 2.7 per cent reduction in economic output for Scotland’s capital in the event of a hard Brexit.
Even if there were a soft Brexit with the UK retaining a free trade deal with the EU, Aberdeen would stay the worst affected with a decline of 2.1 per cent. Edinburgh would remain in sixth place with a decline of 1.4 per cent.
The study showed all British cities would see a fall in output as a result of the increase in trade costs.
The economic impact will be almost twice as big in the event of a ‘hard’ Brexit, which the research predicts will bring an average 2.3 per cent reduction in economic output across all UK cities – compared to a ‘soft’ Brexit, which will result in a 1.2 per cent decrease.
The report said economically vibrant cities in the south of England which would be most affected with Aberdeen and Edinburgh being exceptions that proved the rule.
Cities specialising n large knowledge-intensive sectors such as businesses and financial services, would be most affected by the increase in tariff and non-tariff barriers that Brexit could bring.
Scottish Lib Dem leader Willie Rennie said the report bolstered his party’s case to abandon Brexit.
Mr Rennie said: “This report shows that a Brexit, whether soft, hard or even multi-coloured will have a significant negative impact on major cities across Scotland. With both the Scottish and UK economy in a fragile state we need to build that strength not take it away. Scotland’s biggest cities are shown here to be hit hard by any type of Brexit and the UK government cannot just waive these numbers away.”
A UK government spokesman said it was working on a trade deal to build on the strengths of all cities.