A financial expert has predicted the “ripple effect” of the redundancies from the BMW plant will soon impact on the county’s economy.

While the families of 1,280 agency workers laid off from the Cowley plant are at the front line of the redundancies, they will impact heavily on many other businesses across the county.

Andrew Goodwin, a senior economist with Oxford Economics, said: “Suppliers of car parts will soon feel the effects of BMW’s decreased production.

“Obviously the local economy will feel the effects of the 850 BMW agency workers losing spending power, but also many other members of the public will lose that feelgood factor and rein in their spending, worried perhaps about their own jobs.”

Barry Wheatley, chairman of the Oxfordshire branch of the Federation of Small Businesses, said the job losses had put a “shockwave” through the local economy.

He added: “Traders who offer good value in the right place are still doing well. Customers are becoming more discerning as money is tight and they will not travel long distances to shop.

“It’s too early to say what effect the BMW redundancies will cause. Many of those made redundant might take up jobs at expanding fast food and other food outlets. But there is no doubt that a shockwave is running through the Oxfordshire economy at the moment.”

However, the manager of Cowley’s Templars Square, Aaron Bayliss, said that the shopping centre was doing better in the economic downturn since it offered good value for money.

He said: “A lot of BMW Cowley workers come here to shop for their daily needs and we have seen trade go up over the year. We have found that trade is actually increasing. But I don’t think that would be the case if we sold luxury goods.

“But demand for fast food is increasing, and many people are also buying more cheaper food to take home and eat in. It’s luxury items that suffer first in a recession.”

His remarks tally with recent national announcements that chains such as Dominos Pizzas and KFC are expanding and looking to employ more people.

Meanwhile, the Oxford Economic Partnership, funded by Oxfordshire County Council, is joining forces with the Department of Business Enterprise and Regulatory Reform, Business Link, the Learning and Skills Council, and South East England Development Agency to set up a task force to assess the effect of the redundancies on the county.

Reya Rar, of the Oxford Economic Partnership, said: “We will assess what extra help and support we can bring to people made unemployed.”