Job creation in the capital reached its fastest rate since April 2016 during July, according to the latest figures released by Lloyds Bank.
The London PMI registered 53.2 in July, higher than the 52.2 recorded in June – which marked an 11-month low in growth – but still behind the UK average (54.1). A reading above 50 signifies expansion in business activity.
The Lloyds Bank PMI, or purchasing managers’ index, is the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the amount of goods and services produced during July compared with a month earlier.
Local firms reported a rise in new orders, which drove business activity higher in July, but confidence towards future output continued to wane. The level of optimism among firms in the capital was at a 12-month low.
Businesses also continued to face higher input costs due to the weak pound and rising salary demands. In response, prices charged for goods and services increased.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “London business activity gained momentum at the start of the third quarter. Companies are keen to take on more staff, despite higher salaries affecting their margins and feeling less certain about their future.
“The capital is lagging behind the UK as a whole, but firms will be relying on an upward curve in new business over the coming months.”
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