Background Ethnic inequalities in maternal and neonatal outcomes remain a major public health concern in England. Black and Asian women experience higher rates of severe maternal morbidity, maternal mortality, preterm birth, stillbirth, and neonatal mortality than White women. However, the economic consequences of these inequalities for the NHS and wider society are poorly understood. Aim To estimate the annual healthcare costs and productivity losses associated with ethnic inequalities in maternal and neonatal outcomes in England. Methods A cohort-based economic model was developed for all women in England reaching 24 weeks’ gestation over a 12-month period. Women were stratified into White, Asian, Black, Mixed, and Other ethnic groups. Maternal pathways included antenatal, delivery, and postpartum care up to 42 days after birth, while neonatal pathways included outcomes and healthcare use up to 27 days after birth. Event probabilities and relative risks by ethnicity were estimated using national administrative datasets (primarily 2024–25 data), and published literature. Healthcare unit costs were derived from NHS reference costs and national guidance. Productivity losses associated with premature maternal and neonatal deaths were estimated using a human capital approach. Findings The model included 515,220 maternities. Black and Asian women experienced substantially higher rates of pregnancy complications, emergency caesarean section, hypertensive disorders, diabetes in pregnancy, severe haemorrhage, and maternal infections compared with White women. Babies born to Black women experienced the highest risks of stillbirth, very preterm birth, neonatal intensive care admission, and neonatal mortality. Overall, maternal and neonatal ethnic inequalities resulted in substantial excess healthcare and productivity losses in England, with total additional costs estimated at approximately £352 million annually. The largest share of these additional costs was observed among Asian populations (£174.9 million) followed by Black populations (£128.9 million). Neonatal inequalities accounted for approximately two thirds of the total economic burden. Conclusions Maternal and neonatal ethnic inequalities impose substantial healthcare and societal costs in England. Reducing these inequalities could improve health outcomes while also reducing the associated economic burden. Limitations The study likely underestimates the true burden as it excluded long-term consequences and wider societal costs such as unpaid care, social care, or educational impacts.