THE CBI is concerned that the South East's economy may be showing signs of a slowdown after unemployment, which fell nationally in February by 33,000, actually rose by 5,000 during the same period in the South East.

Although the CBI has hailed the UK's inflation-free march towards full employment as "a remarkable success," there is the growing fear that the South East, an economy worth more than £116 billion and the 22nd largest economy in the world based on GDP, is becoming less competitive.

The employers' body cautioned that, despite the South East unemployment rise, the issue of skills shortages remains a problem, and one which could be exacerbated as the economic recovery gathers pace.

Nigel Bourne, CBI South East regional director, said: “Our concern is that the South East could suffer as wages rise to keep pace with house prices and interest rate rises, forcing companies to relocate or worse still go out of business.

“It is too early to predict this is a trend, but it is an economic indicator that we will be watching closely over the coming months.”