North East UK Economy Grows as Confidence Hits High

The North East economy in the UK has bounced back to growth in October 2025, with business confidence reaching its highest level in over four years. According to the latest NatWest Growth Tracker survey, private sector activity rose sharply, signaling a positive shift amid easing inflation and renewed hiring.

Key Findings from the NatWest Survey

The NatWest Growth Tracker score for the North East climbed from 49.3 in September to 52.3 in October. Any score above 50 points to expansion, and this marks the strongest growth since November 2024.

This uptick beat the UK average, with only London and the South East showing bigger gains. Businesses reported more new orders, which drove the increase in activity.

Experts point to falling cost pressures as a big factor. Input prices rose at the slowest pace in nearly five years, helping firms keep output charges in check.

The survey covers manufacturing and services, key parts of the regional economy. It shows the third growth period in five months, raising hopes for a lasting recovery.

Boost in Business Confidence and Jobs

Business leaders in the North East feel more optimistic about the next 12 months. Confidence scores hit peaks not seen since early 2021, fueled by steady demand and lower costs.

This positive mood led to job growth. Headcounts rose for the first time in months, bucking the national trend where staffing fell slightly.

Local firms shared stories of expanding teams to handle new work. One manufacturer noted hiring skilled workers to meet rising orders from Europe.

The survey highlights how global trade tensions have eased somewhat, allowing more focus on domestic growth. This shift has helped small and medium businesses plan ahead.

Here are some standout stats from the report:

Growth rate: 52.3, up from 49.3
New business: Strongest rise since late 2024
Employment: Renewed increase after recent dips
Inflation: Slowest output price hike in five years

Comparison to Other UK Regions

The North East’s performance stands out against mixed results elsewhere. The North West saw stable growth but slight workforce drops, while Yorkshire reported eight-month high confidence.

London led with a 4.97 percent year-on-year jump, and Northern Ireland topped at 5.29 percent. These figures show broad UK momentum, but the North East’s speed impresses analysts.

Recent data from other sources, like Lloyds Business Barometer, echoes this. North West confidence rose 30 points in October, with more firms planning hires.

Yet, some areas face challenges. The South West and Midlands reported subdued demand, linked to ongoing economic uncertainty.

This regional view helps explain why the North East’s rebound matters. It could signal wider UK recovery after a tough start to 2025.

Factors Driving the Economic Turnaround

Easing inflation played a key role. Costs for materials and energy dropped, giving businesses breathing room to invest.

Government policies also helped. The Autumn Budget in late October boosted sentiment by promising support for regional development and skills training.

Trade improvements added to the mix. Exports to the EU grew, especially in engineering and tech sectors strong in the North East.

Local initiatives, like investments in green energy, created jobs. Wind farm projects near Newcastle drew new funding, supporting the growth seen in the survey.

However, challenges remain. Some firms worry about global events, but overall, the outlook stays bright.

Metric	September 2025	October 2025	Change
Growth Tracker Score	49.3	52.3	+3.0
New Business Growth	Moderate decline	Strong increase	Up sharply
Employment Trend	Slight fall	Renewed rise	Positive shift
Inflation Pressure	High	Lowest in 5 years	Eased significantly
Confidence Level	Steady	Highest in 4+ years	Soared