- Prior 54.3
- Manufacturing PMI 47.1 vs 47.5 anticipated
- Prior 47.0
- Composite PMI 53.3 vs 52.9 anticipated
- Prior 52.9
This could allay any recession fears concerning the UK economic system to start out the brand new 12 months no less than. Demand situations proceed to point out an enchancment however inflationary pressures stay elevated on the month. The speed of enter worth inflation specifically was the best since August final 12 months. And that is not a lot of a welcome improvement for the BOE. S&P World notes that:
“UK financial development has accelerated in February, with
the early PMI survey knowledge pointing to the most important rise in
enterprise exercise for 9 months. That is not at all a
one-off enchancment, as sooner development has now been
recorded for 4 straight months after a quick spell of
decline late final 12 months.
“The survey knowledge level to the economic system rising at a
quarterly charge of 0.2-3% within the first quarter of 2024, allaying
fears that final 12 months’s downturn could have spilled over into
2024 and suggesting that the UK’s ‘recession’ is already
over.
“It is significantly encouraging to see that the upturn in
development has been accompanied by a surge in optimism
about year-ahead prospects to the best for 2 years,
in flip encouraging a second month of elevated
employment.
“Nonetheless, there are a selection of areas of concern. First,
the upturn is being pushed to a big extent by resurgent
demand for monetary companies, in flip predicated on hopes
of an imminent pivot to charge slicing by the Financial institution of England.
In distinction, manufacturing stays mired in contraction
and consumer-facing service suppliers are reporting
falling exercise amid the continuing price of dwelling disaster.
“Second, February noticed the best diploma of provide chain
delays for over one and a half years, linked to Crimson Sea
delivery disruptions. The ensuing elevated price of
delivery contributed to the most important month-to-month rise in promoting
costs for items seen over the previous 9 months.
“Service sector inflation additionally ticked larger, remaining
stubbornly elevated because of larger wage prices and the
pass-through of some larger items costs. The survey
knowledge sign shopper worth inflation operating across the 4%
degree within the coming months – double the Financial institution of England’s
goal.
“With development accelerating and costs on the rise once more,
February’s knowledge imply policymakers are more and more possible
to err on the aspect of warning when contemplating the
appropriateness of slicing rates of interest.”
