UK business activity accelerated sharply in January, with PMI surveys pointing to the strongest momentum in nearly two years. Manufacturing PMI rose from 50.6 to 51.6, a 17-month high, while Services PMI jumped from 51.4 to 54.3, lifting Composite PMI from 51.4 to 53.9, its highest level in 21 months.
According to Chris Williamson of S&P Global Market Intelligence, UK firms “kicked up a gear” despite geopolitical headwinds. The flash PMI reading is consistent with quarterly GDP growth approaching 0.4%, with services—especially financial services and tech—leading the expansion. Manufacturing also showed a gathering recovery, helped by goods exports rising for the first time in four years.
However, the upbeat activity picture is tempered by continued job losses, as firms cut headcount to manage elevated costs. High staffing costs were again widely cited as a driver of higher selling prices, pointing to intensifying inflation pressures above the BoE’s target.
