Revealed: how the recession will affect your city

Study shows places best equipped to weather the economic storm
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A massive programme of regeneration has helped bring new self-confidence to Hull, transforming the city after decades of post-war decline. But the Yorkshire port is the city hardest hit so far by Britain's economic meltdown, suffering the fastest leap in unemployment. Alongside Hull, Liverpool, Belfast and Wigan are the cities worst-equipped to recover from the recession, according to research.

A leading think-tank, the Centre for Cities, warns that every city in the country will be hit by the downturn, but that each one's speed of recovery will vary dramatically depending on the skills of each workforce. Tightened public spending is likely to put pressure on urban jobs.

More than 10,000 people in Hull now claim Jobseekers' Allowance, a rise of 3,000 in just one year. The city, long hampered by its relatively remote location and poor transport links, is rated Britain's least prosperous and second most-socially-deprived city. One-fifth of inhabitants have no formal qualifications.

Unemployment has also climbed sharply in two nearby towns, Barnsley and Doncaster, which are both heavily reliant on the construction industry.

But the centre uncovers a picture more complex than the traditional north-south divide often described in the UK economy.

Despite its rapid growth and high wages, Swindon, home to Honda's UK plant, has the fourth-highest rise in unemployment. Gloucester, a traditional centre of the aviation industry, has also experienced above-average increases in the length of its dole queues and growing deprivation.

Three towns and cities in the north-west of England are seeing sharp unemployment rises – Wigan, Warrington, and Liverpool, which is judged the country's most deprived city. Wigan has been hit particularly badly because its workforce is concentrated in the banking, finance, insurance and construction sectors.

Although Belfast boomed after the end of the Troubles, the report registers alarm over the prospects for Northern Ireland's capital. It says the city's lack of skills – one-quarter of teenagers leave schools with no qualifications – will hamper its recovery. Reading, Aberdeen, Oxford and Cambridge, with their highly-qualified residents and "knowledge intensive" industries, are rated among the best-placed to weather the storm, the Centre for Cities said.

Few jobs have been lost so far in Aberdeen, one of Britain's most prosperous cities. Its position as the hub of the North Sea oil industry should make it more resilient to the recession. The less-glamorous Reading is expected to benefit from high-tech industries and fast links to London.

Bristol, Leeds, Edinburgh and London are put on "amber alert". They will "face significant employment losses" because of their vulnerability to the crisis in the financial sector, but can count on skilled populations and a range of industries to help them recover. In Edinburgh, 44 per cent of working residents have degree-level qualifications – the highest proportion in the country.

Also exposed to the pressures on financial jobs are Aldershot, Newcastle, Nottingham, Crawley and Plymouth. The lowest unemployment rise came in Cambridge, which has the second best-qualified residents.

Similarly well-placed is Oxford, although its property is rated the least affordable in the country. Dermot Finch, the director of the Centre for Cities, said: "UK cities will be hit harder than they anticipate by this recession. Nearly all say they are well-placed to weather the storm – but they can't all be right.

"Cities will lead us out of recession – but they can't just rely on action from Whitehall. Each city needs to plan how to keep its jobs and retrain workers."

Winner: Reading

*Reading is second only to London in the Centre for Cities economic prosperity index, and is rated as one of the best-placed to ride out the recession. The town, with a population of 140,000, has one of the slowest-rising unemployment rates (the number of people claiming jobseeker's allowance went up by only 0.5 per cent in the year to last November), partly because it has many "knowledge-based industries" such as computing, accountancy and insurance, which are less likely to suffer. This sector employs nearly 30 per cent of Reading's workforce. The town also has good transport links, creating what the Centre for Cities calls as a "mutually supportive economic relationship" with London.

Loser: Gloucester

Gloucester is an unlikely candidate to suffer in the credit crunch as it has the third-highest rate of employment in the country at 82.8 per cent. However, the city has seen a rapid hike in registered unemployment, with Jobseeker's Allowance claimants up by 1 per cent – double the rise in Reading – during 2008. Deprivation is also a problem: Gloucester is among 10 places showing the sharpest decline in the rankings. GE Aviation has announced the closure of its Tewkesbury plant, costing up to 200 jobs. Motor parts supplier Takao will suffer 100 job losses. Logistics firm Wincanton's office is likely to close and Toyota is seeking volunteers for redundancy. One of the town's law firms, BPE Solicitors, is on a four-day week.

Dermot Finch: Cities need to be powerful enough to tackle their own recessions: