TOP NEWS: UK Back To Growth In January As Political Doubts Fade

(Alliance News) - The UK services sector returned to growth in January, figures showed on Friday, ...

Alliance News 24 January, 2020 | 9:58AM
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(Alliance News) - The UK services sector returned to growth in January, figures showed on Friday, as receding political uncertainty lifted order books.

The seasonally adjusted IHS Markit/CIPS UK composite output index rose to 52.4 in January from 49.3 in December, climbing above the 50.0 no-change mark for the first time since August.

Any reading below 50 indicates contraction, while one above expansion.

The latest reading was the highest for almost one-and-a-half years and signalled a moderate expansion of business activity across the UK private sector economy. IHS Markit highlighted reduced political uncertainty following the December general election as a main driver for growth, as it had a positive impact on business and consumer spending decisions at the start of 2020.

The seasonally adjusted IHS Markit/CIPS Flash UK manufacturing purchasing managers' index ticked up to 49.8 in January from 47.5 in December and was at its highest since since April.

Higher levels of new work and a slight rise in employment were positive contributions to the index, IHS Markit noted.

The seasonally adjusted IHS Markit/CIPS flash UK services PMI business activity index posted 52.9 in January, up sharply from 50.0 in December and the highest reading since September 2018.

Mirroring the trend for business activity, IHS Markit said survey respondents suggested that receding political uncertainty boosted service sector activity at the start of the year.

Looking ahead, service sector firms recorded a rebound in business optimism to its highest since March 2015, which was linked to improved expectations for both domestic demand and the global economic outlook.

"The survey data indicate an encouraging start to 2020 for the UK economy," said Chris Williamson, chief business economist at IHS Markit. "The uplift in sentiment about the outlook hints at even better growth to come, but confidence needs to continue to rise to ensure this solid start to the year has legs."

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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