Manchester set to fare better in recession than London

Manchester will weather the recession better than London, according to research commissioned by the Local Government Association.

The capital is set to potentially lose 370,000 jobs by the end of 2010, representing 7.9 per cent of its workforce, said the report, whereas the Northwest's losses will be around 230,000, or 6.7 per cent.

The LGA said Manchester and other big cities would not suffer as much as the capital because recent development means they are relatively better placed to cope with the effects of the recession.

According to the survey, by Public and Corporate Economic Consultants, this is partly because the public sector makes up a bigger proportion of the region's economy, and spending on health and education will help to protect against job losses.

The survey, by Public and Corporate Economic Consultants (PACE), assumed that government spending on schools and hospitals would remain at projected levels, and that high-skilled industries, would be "relatively unscathed." It also said, however, that construction and manufacturing industries would be hit hard.

PACE estimate that Britain's gross domestic product will fall two per cent next year and rise by 0.75 per cent in 2010.