The economy of Brighton and Hove is outperforming the rest of the country.

The new city is doing better than most of the South- East and the rest of Sussex.

Latest figures put its growth at eight per cent, compared with 4.9 per cent for the UK and 6.6 per cent for the South-East.

Council leader Ken Bodfish said: "This important uplift in our economy is a result of all the hard work of business leaders working with the city council."

Unemployment in Brighton and Hove had fallen by 36 per cent in two years, adding stability to the local economy.

Coun Bodfish, who is also deputy chairman of the South- East Regional Development Agency (Seeda), said:

"The strength of the city economy benefits the region as a whole and is making a major contribution to increasing prosperity for the UK."

Brighton and Hove has benefited from the strong performance of its financial and new media sectors, which have been the main drivers behind the economic growth of the city in the past two years.

Its economy has grown faster than the Crawley, Horsham and Mid Sussex area, which had seven per cent growth in the past two years.

Employment in Brighton and Hove has grown by 2.9 per cent since 1999, compared with 1.4 per cent growth in the Sussex economy, 1.8 per cent in the South-East and 1.3 per cent in the UK.

Local employment growth has been concentrated in construction, business and financial services and the new media and communications sectors.

The prospects for the City's economy remain strong, with growth forecast to be 6.8 per cent in the next two years, compared to six per cent growth in the Sussex and South-East economies and 5.3 per cent in the UK economy.

Although employment growth is expected to slow in the next two years, it is still forecast to grow faster in Brighton and Hove than elsewhere at 1.4 per cent, compared to 1.2 per cent in the Crawley, Horsham and Mid Sussex areas, 0.9 per cent in the South-East region and 0.5 per cent in the UK.

Seeda said manufacturers' orders in Sussex were not falling away, even in export markets.

The South-East region was unique in not having experienced any decline in manufacturers' export orders in the past year and total orders were expected to be largely unchanged in the next four months.

Seeda chairman Allan Willett said there were signs economic commentators might be offbeam with their predictions of a downturn.

He said: "We must not talk ourselves into a recession. We must guard against unjustified pessimism which could lead to cuts in investment, orders, employment and inventories.

"Recent press coverage highlighting a decline in the manufacturing sector in the South-East, while a significant factor, has missed a key point by merely focusing on employment statistics."

Service sector employment in the South-East was rising and this sector dominated employment in the region, not manufacturing.

Mr Willett said: "We are in a slightly different situation from the rest of the country and the economy is still set to grow slightly through buoyant consumer spending."