London's Economy Today - Issue 231 - November 2021

The overview

• Inflation picks up sharply in October, with higher rates still to come
• UK GDP slows in Q3, but London may have seen more consistent growth
• London’s retail sector may be doing better than average, but the CAZ is still struggling

Economic indicators

• In October, the sentiment of London’s PMI new business activity index remained positive for the ninth consecutive month with the PMI new business index in London increasing from 54.9 in September to 58.3 in October. The nine months from February onwards are the first time there has been positive sentiment since September 2020. An index reading above 50.0 indicates an increase in new orders on average across firms from the previous month.
• Expectations for house prices for the next three months remained positive according to surveyors with the net balance of house price expectations in London at 13 in October, down on 20 in September. The net balance index measures the proportion of property surveyors reporting a rise in prices minus those reporting a decline.
• Consumer confidence in London turned positive in November with the consumer confidence index in London increasing to 1, from -6 in October. 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: The furlough scheme in London

• Use of furlough was relatively high in London, particularly towards the end of the scheme. When the scheme closed there were still around 231,000 London staff on furlough – equal to 20% of the UK’s furloughed jobs at the end of September 2021, up from 15% in January 2021.
• Furlough take-up remained particularly high in certain local authorities in London at the end of the scheme, including those near airports. This includes Ealing (8% of eligible jobs on furlough at the end of the scheme), Hounslow (8%), and Hillingdon (7%) near Heathrow Airport, and Newham (8%) and Redbridge (8%) near London City Airport. The high furlough rates in these areas are likely to reflect (in part) the challenges facing travel and tourism-related industries, where activity is yet to return to normal.
• There is uncertainty around the end of the scheme, but early indicators point to a muted impact on redundancies and unemployment.

London’s Economy Today data on the Datastore

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