London’s Business Boom: PMI Surges, Jobs Thrive, but Inflation Keeps It on Edge
PMI Soars to New Heights
The NatWest London PMI for Business Activity leapt from 53.8 in October to an eye‑catching 56.5 in November. That’s not just a bump—it’s a full‑stop, “everything’s booming” signal for the capital’s manufacturing and services combined.
New Business Inflows Are Swimming in the Good Tide
- October’s gain was followed by November’s even stronger jump—its biggest rise since June.
- London stands shoulder‑to‑shoulder with the West Midlands as the only UK regions showing positive new‑business growth.
- Companies expect interest rates to have hit their peak, nudging confidence higher.
Job Market Dips, Then Dives Back Up
London firms reported a slight uptick in staffing, the first month‑on‑month increase since August, thanks to higher demand. Meanwhile, the UK wider economy still sees a modest drop in hires—though this dip is the gentlest in the current three‑month stretch.
Work‑in‑Hand Remains Low, but Backlogs Are Shrink‑shrink‑shrinking
- The Outstanding Business Index for London stayed below 50 for five consecutive months.
- Despite fewer outstanding projects, companies retain the capacity to clear backlogs, aided by stronger hiring and better supply positions.
Inflation’s Wild Card: Costs Keep Rising
London’s private sector still faces steep input‑price inflation—wages and energy costs are climbing. In fact, the price spike edged higher for the first time in four months, the sharpest among all 12 UK regions tracked.
Prices Charged Are Not Playing Trivial
Output prices in London firms have risen at a brisk pace, third consecutive month of growth—highest since April. This quickening reflects the passing of higher salaries and increased input costs to customers.
Expert Insight
Catherine van Weenen, NatWest London and South East Regional Board: “The sharp lift in London’s business activity is the engine behind the UK’s November growth. The West Midlands is the only other region showing expansion. Output and new business surged sharply, sparking the first job up‑turn since August. However, the latest pricing data signs a risk: input cost inflation has accelerated, pushing firms to raise output charges at the quickest pace since April. The wage‑price spiral of 2023 is adding an extra twist, tightening inflationary pressure on both consumers and businesses.”
