UK PMI Manufacturing rose to 49.8 in January, up from 47.5, beat expectation of 48.8. It’s also just slightly below 50 break-even mark, and was the highest level in nine months. PMI Services rose to 52.9, up from 50.0, beat expectation of 51.1, a 16-month high. PMI Composite rose to 52.4, up from 49.3, turned expansionary, a 16-month high.
Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:
“The survey data indicate an encouraging start to 2020 for the UK economy. Output grew at the fastest rate for sixteen months amid rising demand for both manufacturing and services, suggesting business is rebounding after declines seen late last year. Intensifying political and economic uncertainty ahead of the general election has started to ease, encouraging more spending and helping push business expectations of future growth to its highest since mid-2015.
“The survey is indicative of GDP rising at a quarterly rate of approximately 0.2% in January, representing a welcome revival of growth after the malaise seen in the closing months of 2019. Hiring has also picked up.
“The uplift in sentiment about the outlook hints at even better growth to come, but confidence needs to continue to rise to ensure this solid start to the year has legs.
“It seems likely that the rise in the PMI kills off the prospect of an imminent rate cut by the Bank of England, with policymakers taking a wait and see approach as they assess the performance of the economy in the post-Brexit environment.”