Business activity jumps in England and Wales

Business activity in England is rising at its fastest rate for seven months and in Wales is at its highest since July 2014, according to a survey of Britain's regional economy.

Although London is leading the growth, activity in the West Midlands and Yorkshire & Humber also picked up significantly in March, as new business orders and backlogs of outstanding work grew strongly.

The survey of purchasing managers by Markit for Lloyds Banking Group showed overall private sector manufacturing and services accelerating, but costs and sales remaining stubbornly flat.

The England index rose from 56.9 in February to 59.0, surpassing the 2014 average of 58.3. It is the 29th consecutive month that the index has been above 50.0 - the level that signifies no overall change.

Cost inflation remained flat, the result of falling manufacturing prices offsetting higher input prices at service companies. Average output prices remained steady.

There remains "a continued lack of inflationary pressure in the broader economy", said Lloyds.

The London index for business activity rose to 61.8, an 11-month high, while in the West Midlands the index hit 61.2, a 13-month high.

Yorkshire & Humber also improved at its fastest rate for seven months, but the east of England slumped to a disappointing 22-month low.

The north east, the north west, east midlands and the south west recorded highs of between two and six months.

Tim Hinton of Lloyds said the March upturn in growth showed economic activity was proving resilient.

"Stronger increases in new business point to the economy retaining momentum, as firms bolster workforces in order to keep on top of workloads," Mr Hinton said.

Lloyds said jobs growth in Yorkshire & Humber was at its fastest since 1997, and employment rose in all England and Wales regions.

Mr Hinton added: "Higher employment coupled with low inflationary pressures is likely to support demand in the months ahead."

Scottish business activity fell to a 2-month low to 49.4.

The Markit survey is based on monthly replies from executives at 1,200 private manufacturing and services companies.

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