London's Economy Today - Issue 232 - December 2021

The overview

• Omicron variant leads to the introduction of targeted measures
• London’s labour market shows continued recovery
• Inflation continues to increase and the Bank of England raises interest rates to address this

Economic indicators

• Passenger journeys on London public transport dropped slightly going into winter, and prior to the announcement to work from home with 198.6 million passenger journeys being registered between 17 October 2021 and 13 November, 0.8 million journeys less than in the previous period (19 September – 16 October 2021). In the latest period, 73.7 million of all journeys were underground journeys and 124.9 million were bus journeys.
• In November, the sentiment of London’s PMI business activity index remained positive for the tenth consecutive month with the business activity PMI index for London private firms increasing from 60.5 in October to 64.1 in November. The Purchasing Managers’ Index (PMI) survey shows the monthly business trends at private sector firms. Index readings above 50 suggest a month-on-month increase in activity on average across firms, while readings below 50 indicate a decrease.
• In November, expectations for house prices for the next three months remained positive according to surveyors with the net balance of house prices expectations in London at 13, slightly down on the balance of 14 in October. The net balance index measures the proportion of property surveyors reporting a rise in prices minus those reporting a decline.

London's Economy Today supplement: COVID-19 - London macroeconomic scenarios (December update)

• The main aim of this work is to develop a set of high-level macroeconomic scenarios to inform London’s recovery strategies, reflecting unprecedented uncertainty in the economic outlook. The scenarios are intended as a common framework/set of assumptions to inform further analyses.
• This work includes three core scenario paths for London’s output and jobs until 2030. It complements the in-depth forecast in London’s Economic Outlook, which provides the central scenario.
• In all scenarios, London’s economy is expected to recover to the pre-crisis level of output. Under the Gradual return to economic growth scenario, London’s GVA reaches pre-crisis levels in Q1 2022.
• The employment recovery is projected to be slower than the output recovery, with job numbers reaching pre-crisis levels only in early 2023 in the central scenario.

London’s Economy Today data on the Datastore

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