SOUTHAMPTON should brace itself for a big rise in joblessness this year even though its economic output will be among the best in the UK, research suggests.

The UK Powerhouse report says returning employment to pre-pandemic levels will be difficult despite the announcement of Freeport status for the Solent in the budget.

The report, by law firm Irwin Mitchell and the Centre for Economic and Business Research (Cebr), says Southampton will rise 36 places to number 11 in a league table of cities with the fastest economic growth.

It was among the bottom five cities for economic output in the final quarter of 2020, with gross value added (GVA) of minus 7.3 per cent, but is expected to reach a positive figure of 6.9 per cent by the end of 2021.

But it is set to see a big fall in employment – down 1.7 per cent year-on-year by the end of 2021, putting it in the bottom 10 cities.

The problem is set to be compounded by the end of the government’s furlough scheme.

Hannah Clipston, partner and head of business legal services at Irwin Mitchell in Southampton, said: “Our previous UK Powerhouse report earmarked Southampton as one of the top ten cities for economic growth by Q4 2021 and the revised 11th place spot suggests that the report’s findings remain accurate and the signs are the city is on track to recover strongly from Covid-19.

“The majority of cities in the report face challenges in recovering from covid-19 restrictions and Brexit.

“The report suggests Southampton’s economy will recover better than most, but that offers no immunity from rising unemployment following the conclusion of the furlough scheme.

“The report urges government to prioritise smoothing relations with the EU and Southampton’s Freeport status is being banked on to help this process and grow the economy of the city and the wider region further.

“It will be into 2022 before we see the likely effects, but success or otherwise will also be judged on how far it can help drive a corresponding recovery in the local jobs market.”

The UK Powerhouse report calls for policies to encourage investment and improve skills, and for local government to have plans in place for job creation when furlough ends.

The decision to give a go-ahead to a Solent Freeport – a system for lifting tax and regulation burdens on businesses in designated sites around ports – will boost the economy and deliver a “massive” boost to employment, the report says.

Solent Local Enterprise Partnership (LEP) has suggested more than £2billion could be invested in the region, creating up to 52,000 jobs, more than half of which would be local.