UK economic growth slowed again in August as post-lockdown shortages bite – PMI
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LONDON (Reuters) – Britain’s post-lockdown economic bounce-back slowed sharply in August as companies struggled with unprecedented shortages of staff and materials, but strong inflation pressures cooled a bit, a survey showed on Monday.
The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sinking to 55.3 from 59.2 in July, its lowest since February and a sharper fall than a median forecast of 58.4 in a Reuters poll of economists.
The pace of growth was slightly above the pre-pandemic average but “there are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter”, said Chris Williamson, chief business economist at IHS Markit.
Despite COVID-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages.
Companies have complained that self-isolation requirements for contacts of people with COVID-19 have made it hard for them to find enough staff but those requirements were dropped from Aug. 13 for people who have had two vaccinations.
On a brighter note, a measure of employment hit a record high as furloughed workers return to their jobs and businesses were more optimistic about future output.
A gauge of input prices fell after hitting a more than 20-year high in July and the prices charged by factories moved further away from June’s record high.
The Bank of England is watching to see whether a jump in inflation turns into more stubborn price growth.
The BoE said earlier this month it expected “modest monetary tightening” would be needed over its three-year forecast period.
The fall in the PMI was mostly driven by services firms who make up the bulk of Britain’s economy. Manufacturing dipped only slightly although automotive and electrical goods production fell into decline due mainly due to supply constraints.
Data for the survey was collected between Aug. 12 and Aug. 19.
(Reporting by William Schomberg; Editing by Catherine Evans)
Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.
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