London Business Activity Surges to Seven‑Month High

London’s Biz Boom: Activity Hits a 7‑Month High

Start of 2025 was a bright spot for the capital’s private sector. After a sluggish December, London’s Business Activity Index (BAI) jumped to 54.8 in January – the highest it’s been in seven months. That tells us manufacturers and service firms are packing a punch, producing more and keeping the wheels turning.

Top‑Line Numbers (January 2025)

BAI: 54.8 (up from 54.2 in December)
New work inflows: solid increase (more projects and contracts stepping into the shop floor)
Employment: still a net loss, but productivity gains offset those cuts

Why The Surge?

There’s a few reasons the capital is pulling ahead of the rest of the UK:

Demand stays resilient – London customers keep buying, so businesses stay busy.
Companies are cutting costs smartly, which means the same output comes from fewer people. In other words, “More bang for fewer bucks”.
Bank of England slashes rates last week – the financial pain is gone, letting firms reinvest instead of tighten belts.

Industry Insight

Catherine van Weenen from NatWest says:

“London’s private economy really popped in January. It’s the fastest-growing region out of all 12 places we track – even beating the North East, which is a nice brag to have on your post‑it list.”
“The mix of employment cuts and higher output suggests that London firms are getting more efficient. If you keep trimming the workforce, you’ll still see growth, which is a solid plus for the next few months.”
“On the flip side, pick‑up in inflation and higher staffing costs is sending higher input and output prices along. So keep an eye on pricing risks.”
“With the rate cut weighing on policy, there’s more room to loosen things further this year.”

Looking Ahead

London’s momentum is strong, but economic risks creep in. Watch out for:

Inflation spiking – higher wages mean higher costs that could squeeze prices.
Increasing economic uncertainty – as headlines become cyber‑blows, think about downstream impacts.
More job cuts – will firms keep up productivity gains or feel the heat?

Bottom line: London is beating the national trend, but like any good story, the plot twists are coming. Keep your eyes on the capital’s pulse, and you’ll see where the next chapter takes us.

Performance in relation to UK

London Becomes the Sprinting Star of 2025

A Quick Swing‑Up in Business Buzz

London’s lead: For the 17th straight month this January, London’s private‑sector firms have been piling up new orders faster than any other region.

North East keeps pace: The only other region beating the national trend was the North East.

Why London’s got a leg up

New client wins: Firms report fresh contracts, especially from European customers.

Cautious optimism: Even though global markets still feel a little shaky, London companies are feeling a lot more confident about their sales pipeline and long‑term investment plans.

Where the headlines shout “Growth”

London’s business confidence climbed up from a 14‑month low in December.

Employment dips: Companies reported a steep, accelerated cut in hiring, the fastest slip in four years—though still a tad less than the national trend.

Back‑log depletions: Backlogs shrank for the second month, a gentler pace than down the board. This pull‑back gives firms a breather to finish existing work.

Price Pressure: Cost and Output Inflation

Input costs spiking: London’s average input prices hit a nine‑month high, fueled largely by higher staff costs and a jump in food prices.

Output prices climbing: The seasonally adjusted price index jumped for the fourth consecutive month, owing to the “pass‑through” of food and salary inflation.

Bottom line

London firms are feeling more utterly enthusiastic, even as they trim their workforce and juggle rising costs. The city’s surge in new orders and improved expectations for sales pipelines give it a solid stake to lead the country’s economy into 2025.