London's Economy Today - Issue 221- January 2021

The overview

• COVID-19 vaccine roll-out proceeds rapidly as UK goes into third lockdown.
• London labour market continues to be particularly affected by COVID-19.
• UK air travel corridors have closed although flight numbers are low.

Economic indicators

• 121.1 million passenger journeys were registered between 15 November and 12 December 2020, 1.6 million journeys less than in the previous period (18 October – 14 November). This contraction represents the second fall since the first national lockdown in the Spring and is essentially due to the second lockdown in the capital between 5 November and 2 December. In the latest period, 32.1 million of all journeys were underground journeys and 88.9 million were bus journeys.
• The PMI new business index in London went up in December to 49.1 from 49.0 in November but sentiment remained negative. An index reading above 50.0 indicates an increase in new orders on average across firms from the previous month.
• In January, the consumer confidence index in London fell to -22, where it was at the beginning of the COVID-19 crisis. It was -19 in December. The GfK index of consumer confidence reflects people’s views on their financial position and the general economy over the past year and in the next 12 months. A score above zero suggests positive opinions; a score below zero indicates negative sentiment.

• London's Economy Today supplement: HM Treasury Green Book Review 2020

• HM Treasury (HMT) published an updated Green Book – its guidance for appraising and evaluating projects in central government.
• The following key changes were made to the Green Book appraisal guidance:
  • A stronger requirement for business cases to include a clear set of objectives and a logic chain;
  • A clear understanding of the specific contribution of the intervention to the delivery of relevant strategic outcomes;
  • A new annex on the appraisal of transformational changes;
  • Improved place-based analysis;
  • Improved analysis of differential impacts; and
  • Changes to the discount rate for health, life or intergenerational impacts.
• One of the intended aims of the new guidance is to support areas in need of ‘levelling up’ and as GLA Economics analysis has highlighted (including as part of last year’s Evidence Base for London’s Local Industrial Strategy) ‘levelling up’ is a need that also applies to areas of London. Many parts of our diverse capital suffer from high rates of poverty and deprivation and need investment. The revised guidance should help to improve the appraisal of policies and projects that target these parts of the capital in the same way it should in other parts of the country.

London’s Economy Today data on the Datastore

• The main economic indicators for London are available to download from the Datastore.