The report reveals that the city has replaced Guildford as the destination best placed to support economic expansion over the next 12 months. It is the second time that Cambridge has topped the Vitality Index in the last three years.

The ‘UK Vitality Index’ assesses the UK’s largest towns and cities outside London to provide a health check of their local economies and identify which are most robust, are best positioned to support growth and will provide the greatest opportunities for businesses to expand. The results are based on the analysis of 20 datasets, with each location ranked within six separate categories: most productive, fastest growing, most entrepreneurial, best educated, greenest and rising affluence.

The top 10

Overall, the top 10 towns and cities in the 2016 UK Vitality Index are:

Cambridge
Brighton
Oxford
Reading
Guildford
Bristol
St Albans
Manchester
Edinburgh
Milton Keynes

While locations in the South East dominate, the towns and cities of the Northern Powerhouse collectively saw an increase of 10% in the total sum of the Index scores since last year. This was boosted by Manchester, which moved into the top ten ranked destinations for the first time, and Warrington, which experienced the largest improvement in the survey with its index score rising by 10% from last year.

Bristol is another new entrant into the top ten in 2016, on the back of its growing affluence and educational attainment.

Isabel Watterson, Research Analyst at LSH, said: “The prospects for the country’s major towns and cities during 2016 look promising – nowhere more so than in Cambridge.

“Unsurprisingly, Cambridge does particularly well in terms of educational attainment being home to the UK’s top ranked university, and has the highest proportion of residents qualified to degree level or above. This offers businesses with a quality labour pool and an opportunity to tap into the city’s world renowned reputation as a hub of scientific expertise.

“Affluent commuter towns like Guildford performed well once again, as did dynamic hubs of commerce and high tech industry such as Oxford, Milton Keynes and Reading.

The power of the North

“Although the South East remains the best performing region, it is encouraging to see that the Northern Powerhouse locations together saw an increase of 10% in the total sum of the index scores on last year. As infrastructure is improved, we expect a rise in the number of London-based companies to locate in the region, in order to avoid the rising costs of the capital. This bodes well for sustaining the Northern Powerhouse initiative in the years and decades to come.”