LONDON (Reuters) -British business activity picked up this month after a pre-election lull. The fastest manufacturing growth in two years boosted UK business activity. The strongest inflow of new orders since April 2023 also supported UK business activity, a major survey showed on Wednesday.
The figures may cheer Prime Minister Keir Starmer’s new government – which is targeting faster growth to allow higher public spending – and the Bank of England too, as inflation pressures fell to their lowest in more than three years. #UKBusinessActivity
Although growth so far this year has exceeded most forecasters’ expectations, Britain’s economy has performed relatively poorly since the COVID-19 pandemic.
Among the Group of Seven rich economies, only Germany has done worse, as it took an even bigger hit than Britain from the surge in European natural gas prices which followed Russia’s full-scale invasion of Ukraine in 2022.
July’s S&P Global Flash Composite Purchasing Managers’ Index rose to 52.7 from June’s six-month low of 52.3, a shade higher than the 52.6 forecast in a Reuters poll of economists.
The result was also stronger than the same survey for the euro zone, which fell to 50.1 from 50.9, below all economists’ forecasts and within a whisker of recessionary territory.
British government bond futures fell after the data, pushing the yield spread between British and German government bonds to its widest since early July. #UKBusinessActivity
The services PMI rose slightly less than expected, while the smaller manufacturing sector beat expectations to hit its highest since July 2022.
