Fri. Nov 27th, 2020

UK economy ‘shrinking’ as factories and services companies struggle – business live

Rolling coverage of the latest economic and financial news


10.45am GMT

Howard Archer of EY Item Club suspects that the UK’s PMI readings may improve, now the election is over.

Needs to be borne in mind that December flash #UK #PMI‘s were carried out at time of particularly heightened uncertainty – run-up to General Election. Also bear in mind that November “flash” PMIs were revised up appreciably for both #services & #manufacturing

10.33am GMT

Markit’s PMI surveys are based on interviews with managers at companies across the world economy.

This makes them more timely than official GDP data, and a handy gauge to sentiment in the economy. However, they don’t always match up with the growth statistics, and can be more negative if bosses are most anxious.

U.K. PMIs point to output/GDP shrinking 0.2% in Q4 BUT have been overly pessimistic…gulf suggests these surveys might be more indicative of investment activity (still dismal) than output

Preliminary estimate of UK PMI painting a pretty gloomy picture in Q4, falling from 49.3 in Nov to 48.5 in Dec. Will be interesting to see if this is matched in the official GDP growth stats, as PMI has not matched up v. well of late. Manufacturing fell to 47.4 & services to 49.0

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