Oxfordshire and Thames Valley Rebalancing: UK and Regional Economic Forecast April 2016 26 December 2017

London, the South East and the East of England outperformed the rest of the UK in 2015 London is clearly the fastest growing part of the UK economy in 2015. The capital is strongly linked into, and highly competitive within, the global economy, which continues to grow significantly faster than the UK economy. We estimate a GDP increase of 3.4% for 2015, compared with 2.3% for the UK. The other three southern English regions (South East, South West and East of England) are also likely to have out-performed in 2015. In contrast we attribute growth of only 0.9% to the North East, reflecting its peripheral location but also its high reliance on manufactured exports – problematic given the strong pound. Explicit government policy interventions are not a major factor in explaining 2015 relative growth performance, although Crossrail construction has probably given a further boost to London’s economy. As well as the exchange rate, which will have hurt other regions with large manufacturing sectors, the pattern of growth is likely to have been affected by the strength of consumer demand. That will have benefited service sectors more than manufacturers, because of their lower exposure to imports. This explain the focus of growth in the south of the country, which have a larger concentration on these sectors. Going forward to 2018 our forecasts predict London will continues to outperform, with average annual GVA growth of 3.0%. Neighbours East of England and South East also out-perform the UK average, but less decisively. 26 December 2017

The Thames Valley region specialises in high value add sectors which are expected to prosper Large relative to the SE Small relative to the SE Strong growth in Other Service Activities and Administrative & Support services will be drawn in to support the Thames Valley’s specialisation in ICT and Professional, Scientific & Technical services, Growth in Real estate activities and Construction are forecast to grow as the region performs strongly compared to the rest of the UK as well as the rest of the South East The relative wealth of the region and high disposable income will support growth in arts, entertainment and recreation as the economy Source: Oxford Economics Oxfordshire and Thames Valley 26 December 2017

The Thames Valley region specialises in high value add sectors which are expected to prosper Large relative to the SE Small relative to the SE Source: Oxford Economics Oxfordshire and Thames Valley

It homes a relatively large working age population and is less reliant on London for employment opportunities Thames Valley Rest of South East Greater London Thames Valley Greater London Rest of SE Workplace Earnings Residence Earnings Source: Oxford Economics Source: Oxford Economics Oxfordshire and Thames Valley

The Thames Valley has the highest local earnings of the whole South East Average Workplace based weekly earnings 1 Buckinghamshire 2 Oxfordshire 3 Thames Valley 4 Hampshire 5 West Sussex 1 6 2 Surrey 7 Kent 3 8 East Sussex 7 The heat map above shows the Thames Valley as the region with the highest workplace based earnings, showing the economic concentration in the region This supports the previous slides assessment that it is less reliant on London, especially when compared to the other home counties of Surrey, Buckinghamshire and Kent However, it doesn’t take into account residence based earnings, which if mapped show a much higher concentration in the home counties, especially Surrey which overtakes it as highest earnings. 6 9 Isle of Wight 4 £400-£449 £450-£499 £500-£549 £550-£599 £600+ Key 8 5 9 Oxfordshire and Thames Valley 26 December 2017

Key drivers of regional investment include strong transport infrastructure, and the availability of skills Oxfordshire and Thames Valley

What next for the Thames Valley? The Thames Valley offers an attractive business, employment and living environment It has attracted highly skilled workers which have supported its economic success As it continues to develop and grow, it may experience constraints on skilled labour as well as potential constraints on land and overstretched transport infrastructure Oxfordshire and Thames Valley

Thank you