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Continued Growth In Business Activity Across Most Of The UK

Business activity grew in nine UK nations and regions in June, after having risen in all 12 in the previous month, the latest NatWest Regional Growth Tracker showed.

Key Findings:

  • Nine out of 12 UK nations and regions record growth of business activity in June

  • London tops the growth rankings, ahead of Northern Ireland

  • Yorkshire & Humber underperforms

The NatWest Regional Growth Tracker Business Activity Index is the first fact-based indicator of regional economic health published each month, tracking the monthly change in the output of goods and services across the private sector. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.

The strongest rise in business activity in June was recorded in London (index at 56.1), which went against the general trend and saw growth accelerate from the month before. The South West (53.9) was the only other area where output rose at a faster rate. There were renewed falls in activity in both Yorkshire & Humber (47.7) and Wales (49.7), while the South East's (49.9) upturn stalled.

Sebastian Burnside, NatWest Chief Economist, commented: "Our Regional Growth Tracker shows that most parts of the UK continued to see business activity expand in June, with one or two pockets of real strength. London and Northern Ireland topped the latest rankings, and it's these two that have recorded the strongest average growth so far this year."

"At the other end of the scale, the only notable decrease in activity at the end of the second quarter was seen in Yorkshire & Humber, which the Growth Tracker shows has generally underperformed for the best part of a year."

"Demand conditions varied across the UK in June. The number of nations and regions reporting growth in new business fell, although this masked some stronger performances, especially in Northern Ireland and London, but also in the North West and South West."

"Business expectations took a bit of a hit almost universally in June, reflecting uncertainty ahead of the general election. Encouragingly, however, most areas saw employment rise as businesses continue to forecast growth in activity over the coming year."

"Although neighbouring each other, the South East and South West are seeing contrasting trends in employment. The divergence, which began at the start of the year, has grown in recent months, with the South East seeing its strongest job creation in over a year."

"An acceleration in output charge inflation across most parts of the UK in June shows continued stickiness in prices, which might give policymakers some pause for thought on interest rate cuts."


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