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.
Hopes rise for a ‘soft landing’ for the UK as well as the US economy

In last week’s diary we overlooked the latest UK PMI (purchasing managers’ index) readings, which were due on 22 February, on the basis they seldom elicit much of a market response.
Given services make up the biggest component of the UK economy – as they do in other developed countries, especially the US – the fact the PMI reading was not only in positive territory but ahead of estimates suggests there is grounds for optimism.
The services PMI came in at 54.3, above the consensus of 54.2 and cementing the index firmly in ‘expansion’ territory. This fed through into the composite PMI indicator, which rose from 52.9 to 53.3, again beating forecasts and showing the overall economy to be in expansion mode.
According to index and data compiler S&P Global, the February data highlighted ‘a solid improvement in customer demand, as signaled by the sharpest rise in new work for nine months’, while hopes of a sustained rebound in domestic economic conditions led to the highest level of optimism regarding the year ahead business outlook since February 2022 according to the report.
This led some observers to question whether the ‘technical recession’ which the economy entered in the back half of 2023 isn’t in fact already over.
There will be precious few clues to the state of the UK next week, bar February retail sales data, so all eyes will be on US macro releases and the European Central Bank meeting.
The Fed – and Fed-watchers – will pay close attention to the PCE (personal-consumption expenditure) measure along with the PMI (purchasing managers index) surveys for evidence of price pressures, while the JOLTS (job openings and labour turnover survey) release mid-week has the potential to upset the apple-cart as job creation has been consistently above expectations for the last couple of months.
There will also be an intense focus on the ECB’s governing council meeting on 7 March after rates were left unchanged in January and bank president Christine Lagarde pushed back on talk of policy reversal due to ‘abundant’ price pressures.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Issue contents
Daniel Coatsworth
Editor's View
Feature
- How Latin American emerging markets compare
- Emerging markets: China positive policy moves, US rates shift and what’s happening in Latin America
- Find out what Terry Smith thinks about obesity drugs and AI
- How intangibles can be used to identify great businesses
- Champions of Europe: how to invest in the continent’s best stocks
- Merger activity in the property sector heats up with bid battle for API
- Why is Diversified Energy launching a tender offer and what are investors’ options?
Great Ideas
News
- Seraphim reaches for the stars with 31% year-to-date gains
- Brakes slammed on Mobico recovery as results delay frustrates investors
- Competition authority finds ‘fundamental concerns’ in the UK housebuilding market
- Berkshire cash hits record $168 billion as deals dry up
- Japan’s Nikkei 225 hits all-time high, but what is the next move for investors?