Capital's rally losing steam as cost pressures take their toll on firms
London's bounceback from a snow-hit December lost some momentum in February as services and manufacturing firms laboured under rising cost pressures, an industry survey showed today.
The Markit/Lloyds TSB activity index for business in the capital, where a score over 50 indicates growth, slowed from January's 10-month high of 57.5 to 55 last month. While London has registered six successive months of growth since a shock slowdown last summer, firms warned of soaring fuel and energy costs as well as, worryingly for the Bank of England, higher labour costs. Businesses took on more staff for the first time since last November.
Lloyds TSB Commercial's London director Neil Mahoney said: "Strong cost inflation will place unwelcome pressure on firms' operating margins in the months ahead."
