In May, confidence at London-based firms increased slightly after a drop in April, linked to easing fears over tariffs. The London Business Activity Index indicated a minor contraction in output for the second month in a row, primarily due to tightening client budgets and economic uncertainty affecting demand. However, the rollback of some US tariffs contributed to renewed confidence for future growth. Notably, the rate of price inflation decreased, potentially allowing consumers to regain spending power amid a mixed performance across different UK regions.
The London Growth Tracker continued to signal challenges for the capital's private sector in the second quarter of 2025. Demand for goods and services fell, reflecting the impact of economic uncertainty and increasing prices.
It's encouraging to see growth expectations bounce back, indicating that some of the worries attached to the global economic backdrop have cooled. Businesses in the capital highlighted long-term investments and plans to integrate new technologies as central to their growth strategies.
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