Latest data released by Markit/CIPS - 3 February 2021

  • Composite PMI 41.2 vs 40.6 prelim

The preliminary report can be found here. A slight upwards revision to the initial estimates but it doesn't take away from the sharp fall in January business activity due to virus restrictions and business closures.

Of note, services sector output declined at its fastest rate since May last year. That said, business optimism improved amid hopes of a speedy vaccine rollout - rising to its highest level since May 2014. Markit notes that:

"Service providers experienced a steep downturn in business activity due to the third national lockdown in January, although the speed of decline remains much slower than last spring. Tight restrictions on travel, leisure and hospitality resulted in severely reduced trading among customer-facing businesses.

"Temporary closures led to shrinking demand for business services and a ripple effect of corporate spending cutbacks. As a result, total new work fell at the fastest pace since May 2020 and this setback contributed to a steeper rate of job shedding at the start of the year.

"While the UK economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year.

"Positive news on the UK vaccine rollout pushed up business optimism to its strongest since May 2014 and this improvement contrasted with a decline in confidence reported by service providers in the euro area during January."