London business is on the up but jobs still dropping

London firms saw their fastest growth for four months in October but employers are still shedding jobs, according to a new survey of the capital's businesses.

Markit's business activity index, where a score over 50 signals growth, rose to 54.7 in October from 53.2 the previous month with services firms leading the way.

London's private sector gained more work during October with respondents commenting on stronger market demand and successful marketing campaigns, Markit said. Output rose at a "solid and accelerated rate" as the capital outperformed the national average.

But there was gloomier news on jobs with a slight decrease in private sector staffing in October, which Markit put down to natural wastage and business restructuring.

The decline was the fifth in the past six months and in contrast to employment growth in the UK overall. The figures showed job shedding was focused on the manufacturing industry, as services posted another rise in employment.

October data also signalled a pick up in price pressures in London, with input and output prices rising at faster rates on the month. Respondents put the rise down to higher raw material and personnel costs as well as stronger market demand.