UK economy off to promising start in 2024 as business activity rises again
The UK economy’s private businesses are picking up speed for the third month in a row, and a new survey indicates that business confidence is at its highest since May last year.
The S&P Global/CIPS flash UK purchasing managers’ index (PMI) is a survey that checks how well businesses are doing. In January, it showed a score of 52.5, up from 52.1 in December. If the score is above 50, it means businesses are growing. Economists thought it would be 52.7 this time.
The survey found that the important services sector in the UK, like restaurants and shops, had another good month, reaching a high of 53.8, the best in eight months. People in the service sector said clients seemed more confident, and some noticed an increase in demand because borrowing costs were lower.
Even though manufacturing, which includes making things like cars and appliances, improved to a nine-month high of 47.3, it’s still in a period of contraction.
Despite worries about issues in the Red Sea causing problems, businesses in the UK are feeling more confident than they have since May last year.
“Stronger confidence was attributed to positive signals for client spending, long-term business investment plans, and hopes of a turnaround in the broader economic backdrop,”
said the survey
Chris Williamson, chief business economist at S&P Global Market Intelligence said the survey marks “a promising start to the year.”
“Businesses have also become more optimistic about the year ahead, with confidence rebounding to its highest since last May, Business activity and confidence are being in part driven by hopes of faster economic growth in 2024, in turn linked to the prospect of falling inflation and commensurately lower interest rates,” he commented.