UK PMI 01-2022
  • Prior 53.6
  • Manufacturing PMI 56.9 vs 57.6 expected
  • Prior 57.9
  • Composite PMI 53.4 vs 54.0 expected
  • Prior 53.6

The omicron spread weighed more heavily on services activity in the UK to start the year, with the headline reading falling to its lowest in eleven months. The hospitality, leisure and travel sub-sectors in particular suffered the most while the bright spot was that manufacturing output actually improved to a five-month high.

The other less optimistic news is that input cost inflation remained high and accelerated to its second-fastest on record in the survey, exceeded only by November's peak. Markit notes that:

"A resilient rate of economic growth in the UK during January masks wide variations across different sectors. Consumerfacing businesses have been hit hard by Omicron and manufactures have reported a further worrying weakening of order book growth, but other business sectors have remained encouragingly robust.

"Looking ahead, while the Omicron wave meant the hospitality sector has sunk into a third steep downturn, these restrictions are now easing, meaning this downturn should be brief. Many business and financial services companies have meanwhile been far less affected by Omicron, and saw business growth accelerate at the start of the year.

"Business confidence in the outlook also picked up, driving sustained solid jobs growth. With inflationary pressures remaining elevated at near-record levels, this all adds to the likelihood of the Bank of England hiking interest rates again at its upcoming meeting.”