CITY companies are strong enough to absorb the slowdown predicted to hit the national economy in 2015, a business leader has predicted.

Brighton and Hove is ahead of the national game in its productivity and can accommodate some slack, Tony Mernagh, executive chairman of the economic partnership said.

Incomes will outstrip inflation so residents will feel better off – but the impact of £102 million in public sector cuts over the next four years “won’t be pretty”.

Mr Mernagh added: “Interest rates will rise in the summer though not enough to damage the ‘feel better’ factor, but we are quite a way off the ‘feel good’ factor yet.” The growth of the city’s thriving digital cluster will continue, with homegrown companies spreading their wings on an international scale, Phil Jones, managing director of Wired Sussex, said.

But infrastructure lags behind digital business growth, with demand for workspace and broadband being key challenges.

Giving his wish for 2015, Mr Jones said: “We would dearly like to see the long-awaited work on New England House commence.

“Done right, this and other infrastructure activity can inform and support our city’s inherent propensity to collaborate and its openness to new ways of doing things.”

In tourism and hospitality, a new funding model will be needed as public sector cash dries up.

Despite being a UK tourist hotspot the city is “behind the curve” in its preparation for the imminent funding collapse, Nick Mosley, managing director of the Brighton and Hove Food and Drink Festival, said: “Regardless of these issues, no other city in the UK boasts an independent restaurant scene with such variety and creativity.

“As long as we push this message, keep quality at a high enough level and make the city accessible, our position is safe.”

The popularity of the city as a place to move to makes it imperative planners scrutinise every possible site for development to match the city’s growth targets.

Phil Graves, of Graves Jenkins property, said: “Without this analysis, the city will do a u-turn in terms of economic viability and this needs to be understood very quickly by the stakeholders, both residents and the business community.”

On public sector cuts, Mr Graves added: “Economic growth will be under pressure and further financial restraints to the already over-exposed and challenged planning department will cause chaos with the property sector.”

But 2015 is also the year small businesses will be receiving recognition.

Martin Searle, of the East Sussex Federation of Small Businesses, said: “There are now more entrepreneurs, sole traders and freelancers than ever before.

“As economic recovery has led to falling unemployment, small businesses have been disproportionately responsible for creating new jobs.”