London's Economy Today - Issue 235 - March 2022

The overview

• War in Ukraine stokes higher inflation
• Bank of England caught between conflicting risks as it raises interest rates a third time
• The OBR downgrades its UK growth forecast

Economic indicators

• In February, expectations for house prices for the next three months remained positive and improved according to surveyors. The net balance of house prices expectations in London was 53 in February, somewhat higher than the balance of 38 in January. The net balance index measures the proportion of property surveyors reporting a rise in prices minus those reporting a decline.
• In February, the sentiment of London’s PMI new business activity index remained strongly positive increasing from 61.8 in January to 64.3 in February. An index reading above 50.0 indicates an increase in new orders on average across firms from the previous month.
• Consumer confidence in London went further negative in March with the consumer confidence index in London decreasing to -13 from -3 in February. 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: COVID-19: London macroeconomic scenarios (February 2022 update)

• GLA Economics published its latest macroeconomic scenarios-based forecast for London at the end of February.
• The scenario results presented in this supplement come within a context of continuing unprecedented uncertainty. Overall, GLA Economics judges that risks are tilted to the downside, especially with the war in Ukraine potentially raising global commodity prices even as consumer incomes already faced a squeeze from higher-than-expected inflation. Other headwinds also skew risks to the downside, including the possible emergence of new COVID-19 variants, global supply chain challenges and the risk of skill and geographic labour mismatches due to remote working.

London’s Economy Today data on the Datastore

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