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Key findings

Businesses in all regions feel effects of inflationary pressures in January 

London and North East drive economic growth for country 

Northern Ireland remains the most resilient labour market

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. As in December, London and the North East were the key drivers of activity growth throughout January, followed by Wales and South West with businesses there declaring increases in output during the first four weeks of 2025. Northern Ireland meanwhile moved to the bottom of the rankings, recording a steep and accelerated decrease in business activity.

 

Sebastian Burnside, NatWest Chief Economist, commented: 

"London started 2025 as it ended 2024 – as the regional driver for growth for the UK. The North East, Wales and South West also enjoyed a positive start to the new year but in other areas, elevated price pressures are having an effect. "Firms in every region of the UK reported rising cost pressures in January, as well as indicating steep increases in prices charged for goods and services too. “The Bank of England appears to agree; last week it raised its inflation forecast to 3.7%. And whilst the Monetary Policy Committee hopes this rise is temporary, they are mindful of risks from increasing wages, national insurance contributions and energy costs. “Against this backdrop demand has held up strongest in London and the North East, whilst Northern Ireland has the most resilient labour market, with job creation continuing for 25 consecutive months."

 

Please see the regional reports in full:

 

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