UK private sector activity hits four-month high

22nd Aug 2024 10:57

(Sharecast News) - Activity in the UK's private sector hit a four-month high in August, according to a survey released on Thursday.

The S&P Global flash PMI composite output index rose to 53.4 from 52.8 in July, hitting a four-month high and coming in above expectations for a reading of 52.9.

A reading above 50.0 signals expansion, while a reading below indicates contraction.

Meanwhile, the services PMI printed at 53.3 in August versus 52.5 the month before. This was also a four-month high.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data.

"Both manufacturing and service sectors are reporting solid output growth and increased job gains as business confidence remains elevated by historical standards.

"Although GDP growth looks set to weaken in the third quarter compared to the impressive gains seen in the first half of the year, the PMI is indicative of the economy expanding at a reasonably solid quarterly rate of around 0.3%.

"Inflationary pressures have meanwhile moderated further in August, including notably in the service sector, which has been a key area of concern for the Bank of England.

"The latest survey data therefore help lower the bar for further interest rate cuts, although the still-elevated nature of inflation in the service sector suggests that policymakers will move cautiously."