London output growth stalls in February chills

Ben Southwood
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THE PACE of business growth in London slowed faster than the rest of the UK in February, according to figures out this morning.

London’s purchasing managers’ index (PMI) measure of business activity slid from 52.3 in January to 50.8 last month, figures from Lloyds TSB show, narrowing the margin above the crucial 50 value that signals no change.

By contrast, English output growth fell only a third as much, from 51.6 to 51.1, Lloyds said. UK activity growth also stalled less according to its PMI, which fell from 52.1 to 51.2.

London was also hit with the swiftest pace of input price hikes, according to the numbers, putting pressure on consumer prices.

Out of all the regions, only Yorkshire and the South West of England saw their PMI drop over the month. The South West, along with the North East and Northern Ireland, saw a decline in output over February, according to their below-50 PMI readings.

The best-performing regions were Wales, Scotland and the North West and East of England, all of which registered PMIs clearing 52.

“Businesses kept up growth in February, and there was a welcome gradual rebound in demand following the decline seen at the end of last year,” said Lloyds managing director David Oldfield.

“While this output growth is still weak by the survey’s historical standards, staffing levels remained resilient in almost all regions in February, including areas such as the North East and South West where output declined this month,” Oldfield added.

Analysts are currently betting the UK will narrowly avoid falling into a triple-dip recession – technically two successive quarters of negative GDP growth – by registering a slight increase in output in the first three months of 2013.

But even avoiding a triple-dip, economists are less than upbeat on the overall state of the economy, which expanded just 0.2 per cent during 2012, according to the newest data.