UK braces for ‘rapid and full’ recovery after strong economic data – fr

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UK braces for ‘rapid and full’ recovery after strong economic data – fr


The UK economy is rebounding faster than expected as businesses report the strongest growth in activity in more than 20 years and “hordes” of shoppers spend their money in reopened stores.

The provisional composite purchasing managers index rose to 62 in May from 60.7 in April, marking its highest reading since the record began in January 1998. At the same time, the volume of retail sales in Great Britain Brittany rose 9.2% in April from the previous month, the Bureau of National Statistics reported more than double the forecast for an expansion of 4.5 percent by economists polled by Reuters.

Chris Williamson, chief business economist at IHS Markit, which published the PMI, said the UK “is enjoying an unprecedented growth spurt”. He added that “the growth in production and the order book observed in May, as well as the record level of business optimism, are compatible with a sharp increase in GDP in the second quarter.”

Paul Dales, chief economist at UK consultancy Capital Economics, said the data supported his view that “the recovery will be rapid and complete” and that the economy could return to its peak before Covid earlier than expected.

Philip Shaw, UK chief economist at wealth management group Investec, predicted the UK economy would grow 7.5% in 2021, but said there was “a realistic possibility that the growth exceeds 8% ”.

The PMI survey, based on data collected between May 12 and May 19, partially reflected the reopening of hotels, indoor hotels and other businesses on May 17. .

Factory orders jumped at a record pace, reflecting improving global demand, while the service sector saw near record growth as the opening of the economy allowed more companies to trade.

The services PMI, which accounts for around 80% of the economy, rose to 61.8 in May from 61 the previous month, with growth translating into the fastest pace of job creation since May 2015.

The manufacturing PMI index jumped to 66.1 in May from 60.9 the previous month, helped by strong increases in output, new orders and employment. Manufacturers have noted a marked improvement in demand from the United States and China, as well as an easing of Brexit difficulties when exporting to the EU.

However, PMIs have also reported increasing cost pressures at the fastest rate in 13 years, with manufacturers facing raw material shortages and high shipping costs, and service providers reporting higher wages. high staff.

Jai Malhi, global market strategist at JPMorgan Asset Management, said the data “will do little to allay recent market fears that inflation will be an unwanted guest at the party.”

Concerns about rising prices were supported by strong consumer demand. Retail sales rose more than 10 percent above pre-pandemic levels in April, as restrictions eased and more stores opened from mid-month .

Clothing sales have climbed nearly 70 percent to pre-pandemic levels for the first time since the initial restrictions were imposed in March of last year. Sales of household items are up about 10 percent from March.

Lynda Petherick, head of retail at consulting firm Accenture, said the data showed consumers were heading to the main streets “in hordes” and that she expected sales to increase further in May then. that the reopening of the hotel sector revives city centers.

Further signs of the sector’s strength came from data released by research firm GfK on Friday, which showed UK consumer confidence surged in May, regaining ground lost during the pandemic.

Simon Harvey, analyst at Monex Europe, a UK-based currency exchange firm, said: “Any sign that consumers are drawing on their savings faster than policymakers assume. . . would fuel expectations in the money markets of earlier rate hikes by the Bank of England ”.

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