UK business activity continued to expand in February, with PMI Manufacturing rising from 51.8 to 52.0, marking an 18-month high. PMI Services edged slightly lower from 54.0 to 53.9. PMI Composite improved from 53.7 to 53.9, reaching its strongest level in 22 months.
According to S&P Global’s Chris Williamson, the data point to an “encouraging start” to the year. Output growth across both manufacturing and services has accelerated in January and February. Current readings are consistent with GDP rising just over 0.3% in the first quarter if momentum carries through March.
For the BoE, while firmer activity will be welcomed, relatively modest price pressures and ongoing labor market weakness may keep pressure on BoE to consider further easing.
