The EY 2025 Regional Economic Forecast reports that Edinburgh stands out with a robust forecast for GVA (Gross Value Added) growth in knowledge-intensive sectors, particularly professional, scientific, and technical activities, which are expected to grow by an average 1.9% annually.
“These sectors are significant drivers of GVA growth, contributing to Edinburgh’s overall economic resilience,” said EY.
Glasgow is expected to see GVA growth of 1.6%, with employment growth predicted to be 0.8%.
Aberdeen is projected to trail behind with average annual GVA growth of only 0.9% over the next three years due to a contraction in the energy sector and limited growth in professional services as a result.
“Aberdeen is the only UK city expected to see less than one per cent growth from 2025 to 2028, making it the lowest performing city in the UK,” said EY.
“Aberdeen is also forecast to experience negative household income growth averaging -0.4% from 2025 to 2028.
“This decline is in stark contrast to some other cities where growth in household income is projected to remain relatively strong, including Belfast (1.8%), Manchester (1.5%) and Bristol (1.5%).”
EY said that while all areas of the UK are set to see steady economic growth over the next three years, Scotland is expected to see the slowest GVA growth of the devolved administrations.
The UK is projected to experience an average annual GVA growth of 1.6% from 2025 to 2028, with Scotland expected to reach 1.4%. This positions Scotland ahead of the North East of England, which is forecasted to grow at just 1.3%. Scotland’s 2025 employment growth is anticipated to be 0.4%, compared to the UK average of 0.5%.
London and the East of England are both forecast to achieve annual GVA growth of 1.7% between 2025 and 2028. Close behind are the South East, the South West and Northern Ireland, which are all forecast to match the UK’s pace with annual GVA growth of 1.6% between 2025 and 2028.
EY Senior Partner for Aberdeen, Moray Barber, said: “While some of the lower performing regions and cities are already in positions of economic strength, growth – especially in terms of employment and GVA – is important to maintain that position and a competitive advantage.
“Both governments are arguably ambivalent towards new investment in oil and gas production, and the extension of the Energy Profits levy to 2030 has also acted as a barrier to investment – this despite energy price shocks over recent years, and the geo-political exposure of the UK and European economies’ reliance on imported oil and gas.
“Aberdeen continues to acutely feel the uncertainty over the UK’s energy future, and we’re seeing the reality of the resulting lack of confidence in these figures. The Chancellor’s upcoming Spring Statement – as well as the recently announced consultation to a successor regime to the Energy Profits levy – is an opportunity to reset and offer some much-needed assurance.
“If a sentiment change in global energy policy is triggered by moves in the US, then we could see an increase in finance flow into local projects and initiatives that are greatly needed if true energy transition – and revolution – is to be realised. Without it, then local jobs, our vibrant supply chain economy and the very future of the UK’s energy security continues to hang in the balance.”