London's Economy Today - Issue 174 - February 2017

The overview

• Bank of England raises UK growth forecast for 2017
• Inflation showing highest reading since June 2014
• London in a strong position to face challenges of Brexit

Economic indicators

• Sustained growth in the output of London’s businesses with the Purchasing Managers’ Index (PMI) for Business Activity registering at 54.5, down from 56.1 in December 2016. Index readings above 50.0 suggest an increase in output, while readings below indicate a decrease in activity.
• London firms continue to report an increase in new work with the New Business Index recorded at 55.5, down slightly from December’s reading of 58.6. An Index above 50.0 indicates an increase in new orders from the previous month.
• A further fall in London’s house prices expected with respondents to the RICS Residential Market Survey expecting London’s house prices to fall further between February and April 2017 (net balance of -15).

London’s Economy Today supplement: Fiscal devolution for London

The London Finance Commission (LFC) has argued for greater fiscal independence for the capital in order to invest and cater for growth. GLA Economics published a series of papers to inform the argument for fiscal devolution for London which looked at:

• The issues with council tax and the impact of potential reforms on boroughs and households across London
• How stamp duty works in England as well as other countries, its issues and how it can potentially be reformed
• How some national taxes are set and the main costs and benefits if they were devolved to the capital
• The options for a tourism levy in London including its design, implementation and potential yield
• The relationship between devolution and economic growth

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