Chart of the week
The flash UK PMI reading for January displays a net rebound in both services and manufacturing. The composite PMI hit 52.4 from 49.3 and is the highest reading since September 2018.
This level is in line with annualised growth of just under 2.0%.
Our analysis
This marked improvement in the UK’s economic indicators shows that the outcome of December’s elections has reduced the uncertainty perceived by businesses. At the end of January, the UK will enter a transition period that is scheduled to end on 31 December 2020. In the meantime, the UK government will negotiate a new trade deal with the European Union, which will come into force in 2021.
PMI: the Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.
Flash PMI: the Flash Manufacturing PMI is an early indicator of where the final PMI figure may settle. The flash reading of PMI is an estimate of the Manufacturing Purchasing Managers’ Index (PMI) for a country, based on about 85% to 90% of the total PMI survey responses each month. Its purpose is to provide an accurate advance indication of the final PMI data.
The opinion expressed above is dated 24 January 2020, and liable to change.
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