Fewer people will relocate to the South West to retire or set up businesses as the credit crunch takes hold, according to a leading economics professor.

The South West is the UK region most likely to lose out as tourists and economic migrants - mainly from London and the South East - dwindle, according to the spring edition of the South West Economic Review.The report's author, Professor Peter Gripaios, of the University of Plymouth Business School, said the national downturn was likely to have considerable knock-on effects for the Westcountry because of its dependence on London and the South East regions.

Prof Gripaios said the South East was the main source of tourists, retirees, domestic migrants, second home owners and domestic inward investment - all of which could dry up as the credit crunch really took hold.



The professor said fewer people could holiday in the region, more would find it harder to buy second homes here and businesses could be more inclined to "wait and see" before relocating.

If they moved premises, it could be to lower-cost foreign destinations.

However, people who could find life easier included those wanting to get on the housing ladder and insolvency practitioners.

On the subject of insolvency, the report forecast there would be a rise in both company and individual insolvency.

Although Prof Gripaios said events in America had led to the current downturn, he believed too little UK Government regulation of financial services and the Northern Rock crisis had not helped.

He said: "The huge expansion of the public sector during Gordon Brown's tenure at the Treasury has cost a lot, with a variety of stealth and other taxes gradually eating into disposable incomes."

The report also showed, according to Land Registry figures, that the employment rate for 2006-07 in Devon was 79.2 per cent. Pensioners made up 27.4 per cent of the population in 2005.

A separate report from the Royal Bank of Scotland found that the South West business sector continued to grow in April, despite a less favourable economic backdrop. However, the pace of expansion was the slowest since mid-2005.

Particular weakness was recorded in services, where activity stagnated. Manufacturing output increased at a marked rate and rising costs forced firms to raise prices.


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