London's Economy Today - Issue 233 - January 2022

The overview

• The omicron wave in London has begun to decline
• UK GDP returns to pre-pandemic levels
• UK inflation at a near 30-year high

Economic indicators

• In December, the sentiment of London’s PMI new business activity index remained positive for the eleventh consecutive month with the PMI new business index in London decreasing from 63.8 in November to 57.0 in December. An index reading above 50.0 indicates an increase in new orders on average across firms from the previous month.
• In December, 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 21 in December, higher than the balance of 14 in November. 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 negative in January with the consumer confidence index in London decreasing to -5, from 16 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: The economic impacts under future funding scenarios for TfL

• GLA Economics and Transport for London (TfL) have analysed the implications of a move to a ‘managed decline’ scenario if the Government does not provide the long-term funding required to maintain the capital’s transport services.
• Public transport users would experience an immediate loss of benefits if TfL were forced to pursue severe service level reductions beyond current plans. Furthermore, by severely constraining future capital investment, there would be a gradual but significant accumulation of additional negative impacts.
• Over a ten-year appraisal period, the lost transport and highway user benefits associated with severe service level reductions and a shift from the Financially Constrained to the Managed Decline capital scenario could be worth £7.3bn in present value terms (2019 prices). There will also be wider economic impacts of the cuts in addition to the transport user impacts; we estimate these could be worth a further £4.5bn over ten years in present value terms. Adding together and including the cost of increased carbon emissions, the total economic impacts could be over £12bn. Unless funding is restored, disbenefits would increase rapidly over a longer time-horizon.

London’s Economy Today data on the Datastore

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