Latest data released by Markit/CIPS - 24 January 2020
Those are some decent beats across the board amid post-election sentiment and that has generated a bit of a whipsaw in the pound with cable rising to near three-week highs of 1.3173 before falling back to 1.3125 currently.
The details are actually pretty good as they point to improving business sentiment after the election with manufacturing output also recovering to an eight-month high. As for the headline readings, the services and composite are at their highest level in sixteen months.
Markit notes that:
"The survey data indicate an encouraging start to 2020 for the UK economy. Output grew at the fastest rate for sixteen months amid rising demand for both manufacturing and services, suggesting business is rebounding after declines seen late last year. Intensifying political and economic uncertainty ahead of the general election has started to ease, encouraging more spending and helping push business expectations of future growth to its highest since mid-2015.
The survey is indicative of GDP rising at a quarterly rate of approximately 0.2% in January, representing a welcome revival of growth after the malaise seen in the closing months of 2019. Hiring has also picked up.
The uplift in sentiment about the outlook hints at even better growth to come, but confidence needs to continue to rise to ensure this solid start to the year has legs.
It seems likely that the rise in the PMI kills off the prospect of an imminent rate cut by the Bank of England, with policymakers taking a wait and see approach as they assess the performance of the economy in the post-Brexit environment."
Take note of the word mention in bold.
