London grows at fastest rate for 16 months

 
Julian Harris
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BUSINESS activity in London grew at its fastest rate for 16 months in July, according to a Lloyds TSB survey released today.

Output grew in all regions except Northern Ireland, but London led the way with “by far the strongest expansion”.

“July’s survey data points to an uneven regional recovery, with London advancing clear of the pack,” said John Maltby of Lloyds TSB Commercial.

He added: “Widening growth disparities reflect the differing exposure to high growth export markets, alongside varying sensitivity to government spending patterns and muted domestic consumer spending.”

Growth also accelerated in the east Midlands, reaching a three month high of 54.9 in the purchasing managers’ index (PMI). All scores above 50 indicate economic expansion.

Northern Ireland was the only area to record a dip in business output, with the decline worsening to 43.9 in the PMI scale, down from 44.3 in June.

While commercial activity grew in all English regions, the rate of recovery collapsed in the north west to a seven month low of 50.3, coming close to stagnation. And employment shrank in the north west, as well as in the neighbouring region of Yorkshire and Humber.

“Weakening employment trends across the majority of regions underline the increasing nervousness about the economic outlook,” Maltby added. “Yet the fact that all nine English regions have managed to maintain a degree of business activity growth over the previous month is encouraging.”

Commercial property businesses are also far more confident about the London market than about the rest of the UK, a separate study by Lloyds revealed. Two fifths of medium and large London property businesses expect activity to pick up in the next three to six months, it claimed.