Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
(Alliance News) - UK private sector activity picked up in February driven by a recovery in economic conditions after disruptions due to the Omicron variant at the turn of the year, according to IHS Markit on Monday.
The flash UK services purchasing managers' index reading was 60.8 points in February, up sharply from 54.1 in January. The score beat the market forecast, cited by FXStreet, of 55.5.
The flash UK manufacturing PMI was 57.3 points in February, unchanged from January, but slightly above market expectations of 57.2.
The flash composite PMI score increased to 60.2 points in February from 54.2 in January. The latest reading was the highest since June 2021.
All three readings were above the 50.0 neutral mark.
Markit said private sector output expanded at the fastest pace for eight months, led by a strong recovery in consumer spending on travel, leisure and entertainment.
In addition, private sector companies reported another steep increase in incoming new work in February. Stronger client demand was widely linked to improving confidence about the UK economic outlook and roll back of pandemic restrictions, Markit said.
Chris Williamson, chief business economist at Markit, said: "The latest PMI surveys indicate a resurgent economy in February, as business activity leapt as Covid-19 containment measures were relaxed. With the PMI's gauge of output growth accelerating markedly in February and cost pressures intensifying to the second-highest on record, the odds of an increasingly aggressive policy tightening have shortened, with a third back-to-back rate rise looking increasingly inevitable in March.
"However, the indications of a growing plight for manufacturers will need to be watched, and the service sector's new business index will need to be monitored for signs of the demand revival losing steam. Given the rising cost of living, higher energy prices and increased uncertainty caused by the escalating crisis in Ukraine, downside risks to the demand outlook have risen."
The UK composite PMI was compiled by IHS Markit from responses to questionnaires sent to survey panels of around 650 manufacturers and 650 service providers and was compiled February 10 to 17.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.