- London records the strongest business growth of any UK region
- Employment rises for the first time since October 2025
- Export conditions improve at the fastest rate in four-and-a-half years
London's private sector continued to grow strongly in September, outperforming every other UK region despite a more challenging economic backdrop.
Business activity remained firmly in growth territory, while employment rose for the first time in almost a year and firms remained confident about future prospects.
The headline London Business Activity Index stood at 53.7 in September, down slightly from 54.9 in August but still signalling a solid expansion in activity across the capital's private sector.
London recorded the strongest business growth of any UK nation or region, with output continuing to grow at a much faster pace than the national average.
Employment returned to growth, with staffing levels increasing for the first time since October 2025 and at the strongest rate for almost two years.
While new business growth softened and reached its weakest level in 14 months, companies continued to report rising workloads and new customer wins. Firms also pointed to healthy sales pipelines and improving international business conditions as reasons for confidence.
Catherine van Weenen, NatWest’s Regional Managing Director, Commercial Mid-Market, London & South East, said:
"London businesses continue to show impressive resilience. Despite ongoing economic uncertainty, the capital remains the strongest-performing region in the UK, with firms still growing, hiring and looking ahead with confidence.
"It's particularly encouraging to see employment increase for the first time in almost a year. Businesses are continuing to invest in their future, supported by healthy pipelines and improving international conditions.
"Despite cost pressures remaining a challenge, overall London's private sector has entered the final quarter of the year in a strong position."
Performance in relation to UK
London's private sector continued to outperform the wider UK economy in September, with business activity growing at a much faster rate than the national average.
While the pace of growth eased from August, firms continued to report rising workloads and new business. Order books increased for the fourteenth consecutive month, although growth was the slowest seen during that period. London remained ahead of the national picture, where new business growth was only marginal.
Business confidence softened slightly after August's improvement but remained firmly positive. Firms cited healthy sales pipelines, investment plans and improving international trading conditions as reasons for optimism, with confidence remaining stronger than the UK average.
There were also encouraging signs in the jobs market. Employment rose for the first time since October 2025 and at the fastest pace in almost two years, as stronger demand supported renewed hiring. In contrast, employment continued to edge down across the UK overall.
Meanwhile, outstanding workloads were broadly unchanged, suggesting businesses were largely keeping pace with demand while continuing to work through existing backlogs.
Cost pressures remained elevated during September. Higher fuel and energy costs drove faster increases in business expenses and selling prices, with many firms passing on some of those higher costs to customers. Despite this, London firms continued to report strong activity levels and a positive outlook for the year ahead.
