London employment boom gains momentum despite dip in new business growth

 
Courtney Goldsmith
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Lord Mayor's Hot Air Balloon Regatta
London's economic growth was in low gear in August but employment boomed (Source: Getty)

London's employment boom continued to gain momentum in August, rising for the tenth straight month, a new report suggests.

Private sector job creation reached its fastest rate since January 2016, despite business activity rising at a slower rate than the UK average for the third consecutive month, the latest Lloyds Bank Regional Purchasing Managers' Index (PMI) found.

The London PMI was 52.8 in August, down from 53.2 in July and behind the UK average of 54.0. A reading above 50 signifies business activity expansion.

Read more: London's jobs boom just keeps going as new roles reach 15-month high

Lloyds' PMI, which is based on responses from manufacturers and services businesses about the amount of goods and services produced during August compared with a month earlier, found business orders rose at the slowest rate for six months while overall activity cooled somewhat since July.

Businesses also faced higher input costs in August, which increased at their fastest rate since February this year, due to sterling's weakness and rising salaries.

Average prices charged for goods and services rose marginally and more slowly than in July.

“The London economy remained in a low gear in terms of growth during August, with business activity rising at a slower rate than the UK average for the third month running," said Paul Evans, regional director for London at Lloyds Bank Commercial Banking.

“However, the highlight from the latest survey was a pick-up in the rate of job creation in the capital to a 19-month high, helped in part by a sharp strong rebound in business confidence.”

Read more: London ranked the most prosperous spot in the UK, but its growth is slowing

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