UK to see ‘eye-popping’ growth after services PMI hits 24-year high

Britain’s services sector recorded the biggest jump in activity in 24 years last month, after pubs and restaurants were allowed to resume serving customers indoors following months of lockdown, according to a closely watched business survey. Thursday’s data adds to signs that Britain is enjoying a very rapid initial rebound as lockdown rules relax.

The IHS Markit/CIPS Purchasing Managers’ Index rose to 62.9 in May from 61.0 in April, taking it to its highest since May 1997 and above an initial estimate of 61.8. The composite PMI, which includes previously released manufacturing data, rose to its highest since the series began in January 1998 at 62.9, up from April’s reading of 60.7.

Earlier this week the Organisation for Economic Cooperation and Development forecast Britain would see the fastest growth of any major economy this year. But the scale of Britain’s economic slump last year – the biggest in over 300 years – means it will take longer than the United States, Germany or Japan for output to return to pre-crisis levels.

However, demand was very much domestically driven and the survey showed services exports fell. Businesses blamed this on a mix of COVID travel restrictions and post-Brexit restrictions on their ability to sell services in the European Union.

UK to see ‘eye-popping’ growth after services PMI hits 24-year high, Reuters, Jun 3